Strong numbers in Canada this morning
Friday 4 December, 2020
Daily Currency UpdateCAD - Canadian DollarThe change in the number of employed beat expectations three-fold and the unemployment rate was a half percent better than the forecast.Employment rose by 62,000; it was forecasted to increase by 20,000 in November. The month’s gains followed an increase of 84,000 in October. From May to September, employment grew by an average of 2.7% per month. The unemployment rate was 8.5%, the seventh month in a row that its decreased.The strong employment data benefited the Canadian dollar and demand improved the exchange rate between the USD and CAD. As demand increased for the CAD, it pushed USDCAD lower and it broke through 1.28. USDCAD is approaching trades not seen since October 2018.
Key MoversA second night of intensified talks between Brexit negotiators in London signified that progress could be made. It’s not all plain sailing from here on in for GBP though, and a mini sell off in this morning’s early hours of trading suggest that there is plenty left to do. France has dug its heels in once again. President Manuel Macron said that his country would veto any deal that doesn’t give them enough access to UK waters for its fisheries. However, some deem this as slightly short sighted, as the damage to both sides of the negotiations from a no deal Brexit and its impact on the ever-important financial services sector would leave a much larger hole in both the UK and Europe’s pocket. The financial sector is a dominant part of the UK’s economy. In the same light, European companies are also eager to retain access to the UK’s extensive derivatives market.The Australian dollar extended beyond 0.74 US cents through trade on Thursday as investors continued to chase equities, commodity currencies and risk assets higher amid sustained positive sentiment and risk demand. The S&P 500 and Nasdaq extended gains to record new highs throughout the US session, dragging the AUD above resistance at 0.7410/0.7420 to mark intraday highs at 0.7448. The AUD continues to enjoy a series of higher highs and higher lows, spurred by a positive shift in demand for risk, amid hopes a vaccine will see any Q4 retracement unwound throughout 2021. Having broken above the September 2nd high at 0.7410, the AUD is now poised to make a run toward the psychological 0.75 cent barrier. While upside gains may be harder won in the short term as COVD-19 headwinds still linger in the minds of investors, there is little scope to suggest the long run US dollar downturn will correct itself.
- EUR/CAD: 1.553 - 1.565 ▲
- GBP/CAD: 1.723 - 1.738 ▲
- AUD/CAD: 0.951 - 0.958 ▲
- USD/CAD: 1.279 - 1.288 ▲