The loonie, as the Canadian dollar is best known, reached the lowest level since October 2009 after a report showed the Canadian economy added the least number of workers since November 2011.
Having reached a session high at 1.0945 at 14:01 GMT, USD/CAD traded at 1.0921 at 14:22 GMT, gaining 0.73% for the day. Support was likely to be received at January 9th low, 1.0819, while resistance was to be met at October 2nd 2009 high, 1.0958.
The Canadian dollar was heavily pressured after Statistics Canada reported today the number of employed people declined by 45 900 in December, the most since November 2011, after an increase of 21 600 in November. Analysts had expected that the Canadian employers will hire 14 100 workers in December.
According to the report, the reduction in the number of employed people was mainly due to the enormous decline of full-time workers, whose number decreased by 60 000 in the last month, while part-time workers increased by 14 200.
Adding to bearish sentiment, Canadian unemployment rate also increased to 7.2% in December from 6.9% in the preceding month. Analysts had expected the unemployment to remain unchanged at 6.9%.
Meanwhile, the greenback was supported after the US Labor Department reported the unemployment rate declined to 6.7% last month, the lowest since October 2008, after it stood at 7.0% in November. Analysts had projected the unemployment rate will remain unchanged at 7.0 in December.
However, the US non-farm payrolls data disappointed with only 74 000 hired workers last month, while analysts estimated that employers will add 195 000. Last month payrolls advanced at the slowest pace since January 2011, while payrolls increased by upwardly revised 241 000 from 203 000 in November.
Yesterday, Fed minutes of the December meeting revealed decreasing economic benefits from the bond-buying program, which increased bets that Fed policy makers might extend reductions in their monetary stimulus program in the near future. The Federal Reserve Bank said on December 18th that it will reduce its monthly bond purchases in January to $75 billion from $85 billion.
According to the median estimate of economists surveyed by Bloomberg on December 19th, the Federal Reserve may reduce the purchases in $10 billion increments over the next seven meetings, before ending the program, which tends to devalue the US dollar, in December 2014.
Elsewhere, having reached a session low at 1.6402 at 10:14 GMT, GBP/USD traded at 1.6413 at 10:32 GMT, losing 0.41% on a daily basis. Support was likely to be received at January 8th low, 1.6377, while resistance was to be encountered at January 9th high, 1.6498.
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