Canadian Dollar tumbles post-NFP

• The Canadian Dollar tumbled nearly nine-tenths of a percent on Friday.
• Canada added more jobs than expected, but the Unemployment Rate lurched higher.
• US NFP numbers also beat the street, but sticky wages keep inflation concerns elevated.

The Canadian Dollar (CAD) tumbled into recent lows on Friday, getting pummeled back into the bottom end after mixed datapoints in both the US and Canada pushed investors back into a cautious stance. Both countries saw higher-than-expected job additions in November, but unemployment rates on both sides of the border ticked higher on a monthly basis as well.

Canada added nearly twice as many jobs as expected in November, setting a seven-month high on monthly job growth. However, the Canadian Unemployment Rate accelerated to its highest level in over three years, shattering investor confidence in the Loonie to wrap up the trading week. Coupled with a broad-market tilt back into the safety of the Greenback after November’s US Nonfarm Payrolls (NFP) report, traders pushed USD/CAD back into its highest bids in almost five years. The pair is poised for its highest daily close since May of 2020.

Daily digest market movers: Canadian Dollar tumbles as Canadian Unemployment Rate soars

• The Canadian Dollar nearly a full percent on Friday, while the Greenback rallied across the board, pushing USD/CAD north of 1.4150.
• Canada added 50.5K net new jobs in November, well above the 25K forecast and climbing even further from October’s 14.5K print.
• Despite the upswing in new jobs, the Canadian Unemployment Rate lurched to 6.8% versus the 6.6% forecast and 6.5% last.
• Canadian Average Hourly Wages also declined sharply, falling to 3.9% YoY from the previous period’s 4.9%.
• US NFP rebounded firmly in November, rising by 227K versus the forecast 220K, recovering from October’s revised 36K.
• The US Unemployment Rate also rose to 4.2% as expected in November, ticking up from the previous month’s 4.1%.

Canadian Dollar price forecast

Friday’s Loonie plunge and comparative Greenback surge has bootstrapped USD/CAD into its highest daily close since May of 2020, bolstering bids into chart territory above 1.4150. A recent upswing into the same region failed to generate a bullish close above near-term consolidative highs, implying CAD short positions have successfully pushed into fresh territory in a meaningful way to round out an otherwise unremarkable trading week.

USD/CAD is now up around 7% for the year, rising 1.1% in December alone. If current market dynamics keep bids on the high side, the pair will be poised to close in the green for a fourth straight month.

USD/CAD daily chart