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Forex - USD/CAD tumbles 1% after U.S., Canada jobs reports

Published 09/06/2013, 09:26 AM
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Investing.com - The U.S. dollar tumbled against its Canadian counterpart on Friday, weighed by the release of lower-than-expected U.S. jobs data, as uncertainty over whether the Federal Reserve will begin tapering its stimulus program this month re-emerged.

USD/CAD hit 1.0388 during early U.S. trade, the pair's lowest since August 20; the pair subsequently consolidated at 1.0398, retreating 1%.

The pair was likely to find support at 1.0343, the low of August 20 and resistance at 1.0506, the session high.

The greenback came under broad selling pressure after the Bureau of Labor Statistics said the U.S. economy added 169,000 jobs in August, less than the expected 180,000 increase, after a downwardly revised 104,000 rise the previous month.

The report also showed that the U.S. private sector added 152,000 jobs last month, compared to expectations for a 180,000 rise, following a downwardly revised increase of 127,000 in July.

The U.S. unemployment rate ticked down to 7.3% in August, from 7.4% in July, as more people left the workforce. Analysts had expected the unemployment rate to remain unchanged last month.

In Canada, official data showed that the economy added 59,200 jobs in August, beating expectations for a 20,000 increase, after a 39,400 decline the previous month.

Canada's unemployment rate ticked down to 7.1% last month from 7.0% in July. Analysts had expected the unemployment rate to fall to 7.0% in August.

Meanwhie, market participants continued to focus on the consequences of a potential U.S. military intervention in Syria, as the U.S. government was preparing to vote next week on President Barack Obama's proposal to launch a missile strike.

The loonie was also higher against the euro with EUR/CAD dropping 0.80%, to hit 1.3672.

The euro came under pressure after downbeat German data fuelled fresh concerns over the strength of the recovery in the euro zone's biggest economy.

Official data on Friday showed that German industrial production dropped 1.7% in July, compared to expectations for a 0.5% fall, after a downwardly revised 2% rise the previous month.

A separate report showed that Germany's trade surplus narrowed unexpectedly to EUR14.5 billion in July, from an upwardly revised surplus of EUR15.8 billion the previous month. Analysts had expected the trade surplus to expand to EUR16.1 billion in July.


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