Canadian Dollar Declines Against US Dollar on Positive NFP

The Canadian dollar today declined against its US counterpart after the release of positive US non-farm payrolls data and a better than expected US trade deficit. Statistics Canada also reported that the country added more jobs than expected, but Canada’s trade deficit was higher than expected resulting in a weaker loonie.

The USD/CAD currency pair gained over 100 points at the height of its rally after the release of both the US and Canadian employment reports.

The Canadian dollar weakened against the US dollar after Statistics Canada reported that the country’s net change in unemployment was an additional 10,900 jobs versus the expected 12,500 new jobs. Canada’s international merchandise trade balance also missed expectations as it recorded a deficit of $3.6 billion as compared to the expected $1.25 billion deficit. Canada’s unemployment rate beat expectations as it came in at 6.3% versus the market consensus of 6.5%.

The greenback rallied against the loonie after the Bureau of Labor Statistics released the change in non-farm payrolls for July, which beat the market consensus of 180,000 to create 209,000 new jobs. The US unemployment rate also met expectations by coming in at 4.3%. The US trade balance released by the Census Bureau was also lower than expected as it came in at -$43.6 billion versus the expected -$44.5 billion.

The currency pair’s future performance is likely to be affected by global crude oil prices and the release of the US labor market conditions index scheduled for Monday.

The USD/CAD was trading at 1.2641 as at 16:08 GMT having rallied from a daily low of 1.2553. The EUR/CAD was trading at 1.4855 having declined from a high of 1.4958.

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