- USD/CAD dips vertically below 1.3700 following the release of US-Canada labor market data.
- Job growth in the US and Canada slowed more than expected in October.
- Slower job growth may allow Fed policymakers to push for an end to the rate-tightening campaign.
The USD/CAD pair fell sharply below the round support of 1.3700 after the release of US/Canada labor market data. The Loonies assets witnessing an intensive sell-off as US dollar index (DXY) drops quickly on soft US Nonfarm Payrolls (NFP) report for October.
The U.S. Bureau of Labor Statistics (BLS) reported that job hiring was slower than expected. US employers hired 150,000 jobseekers, down from expectations of 180,000 and 297,000 new jobs in September (revised below). The unemployment rate rose to 3.9% from expectations of 3.8% and an earlier reading.
Monthly average hourly earnings rose at a slower pace of 0.2% compared to September’s 0.3% increase. Year-on-year wage growth was 4.1%, above expectations of 4.0%, but down from 4.2% a year ago. Slower job growth may allow Federal Reserve (Fed) policymakers to push for an end to the rate-tightening campaign.
Meanwhile, investors await the US ISM Services PMI for October, which will be released at 14:00 GMT. The services PMI, which represents the services sector that makes up two-thirds of the U.S. economy, fell to 53.0 from 53.6 earlier.
On the Canadian dollar front, the labor force expanded by 17.5 thousand employees compared to expectations of 22.5 thousand and September’s figure of 63.8 thousand. The unemployment rate rose to 5.7%, versus expectations of 5.6% and an earlier 5.5%. The soft labor market report may allow Bank of Canada (BoC) policymakers to leave interest rates unchanged at 5% at next month’s monetary policy meeting.