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Canadian Dollar Falls on Weak Oil Prices, Despite Upbeat Jobs Report

February 7, 2020 at 16:20 by Simon Mugo

Some Canadian dollar billsThe Canadian dollar today fell against the US dollar following the release of mixed Canadian jobs data and the upbeat US non-farm payrolls report. The USD/CAD currency pair’s rally was also fueled by the decline in global crude oil prices, which dragged the commodity-linked loonie lower.

The USD/CAD currency pair today spiked to a daily low of 1.3279 following the employment reports from the US and Canada before rallying back to its daily high of 1.3321 and was near this high at the time of writing.

The currency pair traded sideways during the Asian session before rallying higher in the early European session. The loonie’s weakness was mostly driven by weak oil prices as tracked by the West Texas Intermediate, which hit a low of 50.08 earlier today. The depressed oil prices were triggered by Russia’s opposition to the new oil output cuts recommended by OPEC+ on Thursday. The release of Canada’s labour force survey for January by Statistics Canada triggered the loonie’s brief spike. The unemployment rate came in at 5.5% beating consensus estimates by 0.1%, while the new jobs created were 34,500 versus the expected 15,000 jobs.

The simultaneous release of the US non-farm payroll report for January by the Bureau of Labor Statistics meant that the loonie’s rally was short-lived. The US added 225,000 new jobs versus the expected 160,000 jobs, while average hourly earnings rose 3.1% beating consensus estimates set at 3.0%. However, the US unemployment rate missed expectations.

The currency pair’s performance over the upcoming weekend is likely to be affected by oil prices and geopolitical events.

The USD/CAD currency pair was trading at 1.3305 as at 16:19 GMT having rallied from a low of 1.3279. The CAD/JPY currency pair was trading at 82.50, having dropped from a high of 82.77.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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