USD/CAD surges to near 1.4100 after US-Canada Employment data

USD/CAD jumps to near 1.4100 after the release of the US-Canada employment data for November.
US NFP came in higher-than-expected and the wage growth remained steady.
Canadian job growth remained robust and the jobless rate accelerated sharply.

Sagar Dua FXStreet

The USD/CAD pair advances to near the round-level resistance of 1.4100 after the release of the labor market data for November from both economies: the United States (US) and Canada.

The US Nonfarm Payrolls (NFP) report showed that 227K fresh workers were added to the labor force, higher than estimates of 200K. The Unemployment Rate accelerated to 4.2%, as expected, higher than the former release of 4.1%.

Meanwhile, Average Hourly Earnings rose steadily by 0.4% and 4% on monthly and annual basis, respectively.

The probability for the Federal Reserve (Fed) to cut interest rates by 25 basis points (bps) has increased sharply to 90% from 71% recorded on Thursday after the release of the US NFP report, according to the CME FedWatch tool.

On the Loonie front, fresh labor addition remained robust in November, while the jobless rate jumped to a record high since September 2021. The economy added 50.5K workers, significantly higher than estimates of 25K and the former release of 14.5K. The Unemployment Rate rose to 6.8%, faster than estimates of 6.6% and the prior reading of 6.5%.

A higher jobless rate would prompt expectations of more outsize interest rate cuts by the Bank of Canada (BoC). The BoC has already reduced its key borrowing rates by 125 basis points (bps) to 3.75%.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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