US dollar lost sharply positions against its Canadian counterpart on Friday, after a report showed US economy added new jobs at a slower than projected pace, which caused uncertainty over a possible stimulus program scale back by the Federal Reserve Bank in September to re-appear.
USD/CAD lost more than 1% during todays trade, falling to a session low at 1.0386 at 12:31 GMT, the pairs lowest point since August 20th, after which consolidation followed at 1.0398, still losing 1.01%. Support was likely to be received at August 20th low, 1.0343, while resistance was to be encountered at current session high, 1.0506.
US dollar found itself largely sold, after the Bureau of Labor Statistics reported that US employers added 169 000 new jobs in the month of August, following the revised down 104 000 jobs in July from 162 000 previously, which implied that labor market in the country was not recovering at a rapid enough pace and this could obstruct Federal Reserves intentions of scaling back the monetary stimulus at its meeting this month. The official report said that non-farm payrolls in the US have initially been revised down by a total of 74 000 during June and July.
Augusts result caused US unemployment rate to tick down to 7.3% during the same month from 7.4% during July. Augusts non-farm payrolls were below the result, registered in August 2012, when 184 000 jobs were added, and also below projections of 180 000 new jobs. The revised value of the indicator during July this year (104 000 jobs) was the lowest in more than one year and was a signal that US labor market was slowing down its development. With the above mentioned new jobs added in August, it might be possible to match the increase of countrys population, but it could hardly be sufficient to rapidly lower the rate of unemployment. The number of US citizens, looking for a job, amounts at over 11 million people, while the number of the employed Americans remains near its lowest for the past 30 years.
In the mean time, Canadian economy managed to add three times more new jobs in August, following the sudden loss of jobs in July, as employers in the country have been hiring stuff on a part-time basis mostly. The number of new jobs climbed to 59 200 in August, after in July it fell by 39 400. With this result reported, preliminary estimates have been outpaced considerably, as they pointed 20 000 new jobs. Canadian unemployment rate unexpectedly diminished to 7.1% in August from 7.2% a month ago, while projections showed that the rate will remain without any change. New part-time jobs amounted at 41 800 and the new full-time jobs – at 17 400. Despite this recorded increase in Canadian employment in August, some experts expressed concerns that jobs data in the country has been highly volatile so far this year, showing formidable climbs, followed by sudden drops on a monthly basis.
Market players continued to eye the prospects of a potential military intervention in Syria by the United States and its allies, as the US government was making preparations to vote next week on President Barack Obamas call to commence a missile campaign.
Elsewhere, the loonie, as Canadian dollar is also known, was advancing against the euro, with EUR/CAD cross losing 0.70% on a daily basis to trade at 1.3690 at 14:27 GMT. GBP/CAD pair was also on negative territory, falling 0.77% today to trade at 1.6255 at 14:28 GMT.
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