The USD/CAD pair fell as investors reacted to the unemployment rate in Canada.
The unemployment rate dropped to 8.9% while the economy created more than 87,000 new jobs.
The pair also responded to the ongoing vote count in the United States.
The USD/CAD pair fell today as traders responded to the Canadian job numbers. It is trading at 1.3072, slightly below the weekly high of 1.3100.
USD/CAD drops as Canada’s unemployment rate improves
Number of jobs in Canada
The Canadian economy is experiencing the worst downturn in modern history because of the Covid 19 pandemic. In recent weeks, the number of daily infections has increased to reach a peak of 4,675 this week, and the country has confirmed more than 251,000 cases and more than 10,000 deaths.
The country also had to struggle because of the relatively low crude oil prices. As the world’s fifth largest exporter, a drop in the price of oil generally leads to lower demand for the Loonie.
In general, all these factors have had an impact on the country’s labor market. According to Statistics Canada, the economy created more than 83.6 thousand jobs in October as the recovery continued. This was slightly below what a panel of analysts surveyed by Reuters expected. Nevertheless, the figure was lower than the previous month’s figure of 378,000.
At the same time, the unemployment rate fell to 8.9% from 9.0% in the previous month. This figure measures the number of people of working age who are unemployed. The employment rate rose from 65.0 to 65.2%.
These figures show that the Canadian economy is on a recovery path. However, given the increase in Covid cases, there is a chance that this growth may come to a halt.
The US Factor
The USD/CAD is also falling due to the situation in the United States, which went to the elections this week. Although the final balance has not yet been released, the market believes that Joe Biden has the upper hand over the incumbent.
The US Bureau of Labour Statistics (BLS) today also released the country’s non-farm employment figures. The data showed that the economy created more than 638,000 new jobs in October, while the unemployment rate dropped to 6.9%. The average working week remained unchanged at 34.8 hours, while average hourly earnings rose by 0.2%.
These figures came one day after the announcement of the Fed’s interest rate decision. It left interest rates and quantitative easing policies unchanged and promised to continue to support the economy.
Technical Outlook USD/CAD
USD/CAD technical table
On the daily chart, we can see that the USD/CAD pair formed a double peak pattern at 1.3420 between September and October. As you will find in our Forex trading charts, this pattern is usually a bearish signal. The price is also below the 25-day and 50-day exponential moving averages. As such, it appears that the bears are holding steady, and are likely to target the next support level of 1.3000.