Daily Currency Update

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Despite job losses, Canadian dollar keeps recent gains

CAD - Canadian Dollar

The unemployment rate remained relatively flat while 62,000 jobs were lost in December on the heals of COVID-19 lockdowns. The Canadian dollar maintained its newfound strength.

As demand for the US dollar fell yesterday and overnight, USDCAD was range bound between 1.2675 and 1.2705. As equity markets opened this morning, USDCAD fell to 1.2662.

Economists forecasted a small loss of about 32,000 jobs, and instead employment came in lower than expected. Its not good for currency when the actual number is less than the economists’ forecasts. However, rising equity markets allowed investors to expand into Canadian portfolios.

Key Movers

German industrial production figures added hopes that the country will avoid a double dip recession. Industrial production is a crucial facet of economic output in the country and has shrunk by 2.6% for the year. The euro is struggling in the last 24 hours despite this but perhaps Germany's forthcoming GDP estimate could stem the loses.

It was another mixed day for the pound yesterday as it continued it lost its luster following the Brexit trade deal. Sterling hasn't found the legs to break above GBPUSD 1.365 let alone make another go at GBPUSD 1.37. So, what is weighing on the currency now? Ultimately there is more and more fervor about the Bank of England cutting interest rates to below zero, particularly with the fresh lockdown the UK is now in.

The Australian dollar edged off recent highs Thursday, slipping back below 0.78 US cents amid a broader US dollar rebound. Having touched highs at 0.7820, the AUD was forced back below 0.7750, toward intraday lows at 0.7730, as the US dollar found support amid an uptick in treasury yields and optimism democrat-led stimulus measures that will help lead an economic rebound throughout 2021. Having broken above 0.78, the door is now open for a move toward 0.80.

Expected Ranges

EUR/CAD: 1.550 - 1.560 ▼

GBP/CAD: 1.719 - 1.726 ▼

AUD/CAD: 0.983 - 0.988 ▼

USD/CAD: 1.266 - 1.273 ▼