USD/CAD stays below 1.2700 after disappointing US and Canada jobs reports
- USD/CAD is struggling to find direction after US and Canada labour market figures.
- US Dollar Index returns to the negative territory after testing 90.00.
- Nonfarm Payrolls in US fell by 140,000 in December.
The USD/CAD pair spiked above 1.2700 in the early American session but failed to push higher as investors assess the latest labour market figures from the US and Canada. As of writing, the pair was down 0.1% on a daily basis at 1.2675.
Coronavirus surge impacts North American labour market negatively
The US Bureau of Labor Statistics reported on Friday that Nonfarm Payrolls in the US declined by 140,000 in December. Although this reading missed the market expectation for an increase of 71,000, the Unemployment Rate stayed unchanged at 6.7%. On a positive, wage inflation, as measure by the Average Hourly Earnings, surged by 5.1% on a yearly basis in December and surpasses analysts' estimate of 4.4%.
With the initial market reaction, the US Dollar Index (DXY) jumped higher toward 90.00 but quickly turned south as investors are likely seeing this report as a factor that would force the Fed to remain extremely dovish. At the moment, the DXY is down 0.1% on the day at 89.73.
On the other hand, Net Change in Employment in Canada came in at -62,600 in December, compared to experts' forecast of 27,500, and the Unemployment Rate ticked up to 8.6% from 8.5% in November. Despite the broad-based USD weakness, the loonie struggles to find demand following the dismal Canadian jobs report.
Technical levels to watch for