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By xemarketanalysis February 8, 2019 1:29 pm
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    XE Market Analysis: Canadian Dollar Surges Ahead on Strong Employment Report

    OVERVIEW

    • The US dollar moves higher for the seven-session in a row, with the DXY index near January high. 
    • British Pound closing the week, 1% down against the greenback amidst growing Brexit uncertainty.
    • NYMEX WTI Crude takes a breather, after falling nearly 2.5% yesterday.

    HIGHLIGHT

    The Canadian dollar is trading in a very bullish mood this morning, following better than expected jobs report. Employment increased by 67k, driven by jobs for youth in services and strong private sector hiring. The CAD is now fetching around 75 cents US and up nearly 0.3% on the news.

    US DOLLAR

    The US dollar clocked a seven-day high against the G-10 currencies despite political noises from Washington. The market remains cautious with reports emerging that the US Administration is unlikely to have a deal of substance with the Chinese officials. Meanwhile, the Canadian economy surprised the market this morning with better than expected labor report. The Labour Force Survey revealed the number of people employed rose by 67k versus 6k expected. The calendar is light today and we expect the market to trade within tight ranges.

    BRITISH POUND

    GBP/USD remains volatile as ever as the sentiment swing from the optimism to the pessimism pendulum over Brexit. The Bank of England cautions the market that a hard exit will impact the UK growth but the Governor also hinted that markets should not discount a “scenario without rate hikes”. PM May is hoping to be able to convince EU officials over a better withdrawal agreement.

    EURO

    EUR/USD is oscillating around the mid-point of 1.13 and inside a tight trading range. We had second-tier data out of Europe and failed to inject any trading impetus. French manufacturing output bounced back 1.0% in December but it was still down over the last quarter. Recent soft data out of the Euro area has been weighing on the shared currency since the end of January. 

    CANADIAN DOLLAR

    The Canadian loonie surged nearly 0.4% after the labor market added 67k new jobs. The latest data comes as a surprise as everyone was expected a meager growth of 6k. The economy remains under the stress of the volatile oil market, growing household debt and escalating tensions with major trading partners. WTI oil price is steady today, after declining 2.4% yesterday.

    AUSTRALIAN DOLLAR

    AUD/USD is trading with a negative bias after the report showed the Chinese manufacturing came below market estimates. PMI was at 48.3 versus 49.6 estimates, its lowest level since Feb 2016. The pair is now trading 0.3% lower and expects it to trade with a bearish tone going over the weekend.

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