Investing.com - The U.S. dollar fell to a more than three-month low against its Canadian counterpart on Friday, as demand for the loonie was boosted by higher crude oil prices while upbeat U.S. employment data improved market sentiment.
USD/CAD hit 0.9927 on Friday, the pair’s lowest since October 31; the pair subsequently consolidated at 0.9932 by close of trade on Friday, shedding 0.77% over the week.
The pair is likely to find support at 0.9894, the low of October 28 and resistance at 1.0047, the high of February 1.
The loonie found support on Friday as crude oil rose for the first time in six sessions. On the New York Mercantile Exchange, light sweet crude futures for delivery in March rose 1.5% on Friday, settling at USD97.83 a barrel by close of trade.
Raw materials, including oil account for about half of Canada’s export revenue.
Also Friday, official data showed that Canadian employment change rose less-than-expected in January, advancing to 2,300 from 17,500 the previous month. Analysts had expected employment change to rise to 23,300 in January.
The report also showed that Canada’s unemployment rate ticked up to 7.6% from 7.5% in December.
Earlier in the week, data showed that Canada’s gross domestic product contracted by 0.1% in November, confounding expectations for 0.2% growth.
Meanwhile, better-than-expected U.S. employment data dampened expectations for a new round of quantitative easing by the Federal Reserve.
The U.S. Department of Labor said nonfarm payrolls rose by 243,000 last month, the fastest increase in nine months, after a revised 203,000 gain in December. Economists had expected the U.S. economy to add 150,000 jobs in January. The unemployment rate unexpectedly declined to a three-year low of 8.3%.
A separate report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.
In testimony to the House Budget Committee in Washington on Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.
But market sentiment remained under pressure amid concerns over delays in negotiations on a debt restructuring deal for Greece persisted, despite assurances from European officials that a deal is close to being finalized.
Greece needs to secure an agreement with its private creditors on a debt swap deal in order to receive its next tranche of bailout funds in order to avoid a default when a EUR14.5 billion bond repayment comes due on March 20.
In the week ahead, investors will be watching developments in the euro zone, with European leaders holding a string of meetings to discuss Greece’s bailout and the financial guarantees for the European Financial Stability Facility, the euro zone’s new bailout fund.
Meanwhile, the European Central Bank is to hold its policy setting meeting, but the bank is widely expected to keep rates on hold at 1%.
In the U.S., Fed Chairman Ben Bernanke is to testify before the Senate budget committee in Washington.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 6
Canada is to produce a report on the Ivey purchasing managers’ index, a leading indicator of economic health.
Tuesday, February 7
Canada is to publish official data on building permits, an excellent gauge of future construction activity.
In the U.S., Fed Chairman Ben Bernanke is due to testify on the economic outlook and federal budget situation before the Senate Budget Committee in Washington.
Wednesday, February 8
Canada is to produce industry data on housing starts, while the U.S. is to publish a government report on crude oil stockpiles. The data can be a big market mover for the loonie due to the size of Canada's energy sector.
Thursday, February 9
The U.S. is to publish government data on unemployment claims, an important signal of overall economic health.
Friday, February 10
Canada is to release official data on the trade balance.
The U.S. is to round up the week with official data on the country’s trade balance, as well as preliminary data from the University of Michigan on consumer sentiment and inflation expectations.
Later in the day, Fed Chair Ben Bernanke is due to speak about the housing market at the 2012 National Association of Homebuilders International Builders show.
USD/CAD hit 0.9927 on Friday, the pair’s lowest since October 31; the pair subsequently consolidated at 0.9932 by close of trade on Friday, shedding 0.77% over the week.
The pair is likely to find support at 0.9894, the low of October 28 and resistance at 1.0047, the high of February 1.
The loonie found support on Friday as crude oil rose for the first time in six sessions. On the New York Mercantile Exchange, light sweet crude futures for delivery in March rose 1.5% on Friday, settling at USD97.83 a barrel by close of trade.
Raw materials, including oil account for about half of Canada’s export revenue.
Also Friday, official data showed that Canadian employment change rose less-than-expected in January, advancing to 2,300 from 17,500 the previous month. Analysts had expected employment change to rise to 23,300 in January.
The report also showed that Canada’s unemployment rate ticked up to 7.6% from 7.5% in December.
Earlier in the week, data showed that Canada’s gross domestic product contracted by 0.1% in November, confounding expectations for 0.2% growth.
Meanwhile, better-than-expected U.S. employment data dampened expectations for a new round of quantitative easing by the Federal Reserve.
The U.S. Department of Labor said nonfarm payrolls rose by 243,000 last month, the fastest increase in nine months, after a revised 203,000 gain in December. Economists had expected the U.S. economy to add 150,000 jobs in January. The unemployment rate unexpectedly declined to a three-year low of 8.3%.
A separate report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.
In testimony to the House Budget Committee in Washington on Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.
But market sentiment remained under pressure amid concerns over delays in negotiations on a debt restructuring deal for Greece persisted, despite assurances from European officials that a deal is close to being finalized.
Greece needs to secure an agreement with its private creditors on a debt swap deal in order to receive its next tranche of bailout funds in order to avoid a default when a EUR14.5 billion bond repayment comes due on March 20.
In the week ahead, investors will be watching developments in the euro zone, with European leaders holding a string of meetings to discuss Greece’s bailout and the financial guarantees for the European Financial Stability Facility, the euro zone’s new bailout fund.
Meanwhile, the European Central Bank is to hold its policy setting meeting, but the bank is widely expected to keep rates on hold at 1%.
In the U.S., Fed Chairman Ben Bernanke is to testify before the Senate budget committee in Washington.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 6
Canada is to produce a report on the Ivey purchasing managers’ index, a leading indicator of economic health.
Tuesday, February 7
Canada is to publish official data on building permits, an excellent gauge of future construction activity.
In the U.S., Fed Chairman Ben Bernanke is due to testify on the economic outlook and federal budget situation before the Senate Budget Committee in Washington.
Wednesday, February 8
Canada is to produce industry data on housing starts, while the U.S. is to publish a government report on crude oil stockpiles. The data can be a big market mover for the loonie due to the size of Canada's energy sector.
Thursday, February 9
The U.S. is to publish government data on unemployment claims, an important signal of overall economic health.
Friday, February 10
Canada is to release official data on the trade balance.
The U.S. is to round up the week with official data on the country’s trade balance, as well as preliminary data from the University of Michigan on consumer sentiment and inflation expectations.
Later in the day, Fed Chair Ben Bernanke is due to speak about the housing market at the 2012 National Association of Homebuilders International Builders show.