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The US Dollar fell to a 2-week low against the Canadian Dollar, as Statistics Canada reported lower unemployment and better than expected job gains in January.
The Net Change in Employment was announced at 29.4 thousand jobs, which was the best gain in employment in five months and better than expectations for an additional 20 thousand jobs in January. The unemployment rate fell to 7.0%, beating expectations for joblessness to fall only 1 percentage point from 7.2% unemployment in December.
However, the gains in employment were tainted by the participation rate falling to 66.3% in January, which was the lowest participation rate in over a decade. On a positive note, the employment change was comprised of a 50.5 thousand rise in full time jobs and a 21.1 thousand decline in part time positions, which was the a reverse of the gains in part-time jobs and fall in full-time employment seen in December.
In January, the Bank of Canada said that the direction of its next interest rate move depends on data flow. Therefore, better employment data adds to arguments for the central bank to look to tighten monetary policy. The BoC had mentioned the possibility of a rate increase up until last October.
However, because of a simultaneously released disappointing US Change in Non-Farm Payrolls print, a lot of the decline in USD/CAD was due to US Dollar weakness. The pair may next find support by the January 15 high at 1.0991.
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USD/CAD 1-Minute: February 7, 2014
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to email@example.com .