Loonie gains traction after BoC holds rates

Key Movers

The US dollar was trading in the red this morning, shredding away previous gains after the release of the Automatic Data Processing Inc. (ADP) employment data. The data showed that private payrolls increased by 103,000 in the US during November which was below market expectations and a 9.7 % decrease from the previous month’s reported figure of 113,000. These ADP numbers came two days before the more largely watched non-farm payrolls data which will be released by the United States Department of Labor on Friday. After the ADP data release, the US Trade Balance data for October was released showing that the goods and services trade balance widened from a $61.5 billion deficit to a $64.3 billion deficit.

The euro trimmed some of its losses against the USD in the early session following the ADP employment data release. The EUR/USD pair was seen trading in the green zone and approaching the intra-day high of 1.0800. On the data front, new German production orders dropped 3.7% in October against market expectations for a relatively flat performance. These figures were followed by the region’s services Purchasing Manager’s Index (PMI) which showed shrinking activity for the fourth consecutive month in November.

The pound remained vulnerable with even the US employment data lending little support to the recovery of GBP/USD. The GBP’s recovered slightly to 1.2614 but slipped back to the 1.2600 level. Data released by UK S&P Global showed that the construction PMI declined to 45.6, against expectations of an improvement to 46.3.