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  • USD/CAD dropped to its lowest level in more than two years below 1.2800.
  • Unemployment Rate in Canada declined to 8.5% in November.
  • US Dollar Index turned flat on the day near 90.70 after NFP report.

After spending the first half of the day fluctuating in a tight range near 1.2850, the USD/CAD came under renewed bearish pressure during the American trading hours and slumped to its lowest level since October 2018 at 1.2790. As of writing, the pair was trading a couple of pips above that level, losing 0.5% on a daily basis.

CAD comes out on top after US and Canada jobs data

The upbeat jobs report from Canada provided a boost to the loonie on Friday. The monthly data published by Statistics Canada showed that the Unemployment Rate declined to 8.5% in November, compared to analysts’ estimate of 8.9%. Additionally, the Net Change in Employment arrived at +62,000 and surpassed the market expectation of 20,000 by a wide margin.

On the other hand, the US Dollar Index (DXY) struggled to stage a convincing recovery after the US Bureau of Labor Statistics’ labour market data. The DXY is currently unchanged on the day at 90.68 and remains on track to close the third straight week in the negative territory.

Nonfarm Payrolls in the US rose by only 245,000 and fell short of experts’ forecast for an increase of 469,000. Despite this disappointing reading, the S&P 500 Index surged to a new record high on Friday to show risk flows remain in control of financial markets. 

Meanwhile, the barrel of West Texas Intermediate (WTI) is rising nearly 1% on Friday and allowing the commodity-related CAD to continue to outperform its rivals.

Technical levels to watch for