CAD Employment Figures Boost The Loonie
December 8, 2007
The Canadian dollar rose sharply against USD after the employment figures came well above forecasts. Statistics Canada reported that in the month of November Canadian economy added 43,000 jobs versus 8K which was expected by economists. The Canadian dollar gained more than 100 pips in the first minutes after the report as seen in the 5-min chart below. It stalled at the 1.0004 mark before pulling back. CAD lost some ground as both oil and gold drifted lower during the trading day, closing at 88.28 (-1.95) and at 800.200 (-6.900) respectively.
There wasn’t much reaction in the USD after the US Nonfarm Payroll report which was slightly higher than expected 93K jobs added vs 75K expected. It stayed within its recent trading range against CAD and other majors. Strong US data decreased the likelyhood of a 50bp rate cut dunring its upcoming FOMC meeting on December 11th.
Today’s Strategy: USD/CAD is bounded by two major levels: 1.0215 resistance and 0.9935 support. Long term charts show the overall uptrend in the pair. This week’s strategy - buying on bounce of 0.9935 with a 30 pip stop or buy on break through 1.0215 with 30 pip stop.
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