USD/CAD corrects after US NFP, remains well-supported above 1.3900
|- USD/CAD falls slightly to near 1.3900 after the US NFP report for October.
- Labor growth was significantly lower due to hurricanes that affected various regions.
- The US Manufacturing PMI surprisingly declined at a faster pace.
The USD/CAD pair corrects mildly to near the round-level support of 1.3900 in Friday’s New York session. The Loonie asset drops after the release of the United States (US) Nonfarm Payrolls (NFP) data for October, which showed lower job additions at 12K against the estimates of 113K and the former release of 223K in September, downwardly revised from 254K.
Fresh payroll data appears to be in sharp contrast against the ongoing recruitment trend due to hurricanes in Florida and strikes in the aerospace industry.
The Unemployment Rate remained steady at 4.1%, as expected. Also, Average Hourly Earnings rose expectedly by 4.0%.
The immediate effect of the labor market data was bearish on the US Dollar (USD), while it recovered all intraday losses. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, strives to gain ground above 104.00.
Meanwhile, the ISM Manufacturing PMI for October has come in surprisingly weak. The Manufacturing PMI, which represents activities in the manufacturing sector, declined to 46.5. Economists expected the index to continue to contract but at a slower pace to 47.6 from 47.2 in September.
In the Canadian region, rising expectations of more interest rate cuts by the Bank of Canada (BoC) continue to weigh on the Canadian Dollar (CAD). The BoC has already reduced its key borrowing rates by 125 basis points (bps) to 3.75% this year.
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