On Friday, the U.S. dollar increased near to its two-week highs against its Canadian counterpart, as a positive U.S. employment report increased demand for the greenback and additional disappointing Canadian jobs statistics weighed on the local currency.
USD/CAD attained 1.3079 in early U.S. trade, the pair’s peak since June 28, then the pair consolidated at 1.3025, adding 0.17 percent.
The pair was expected to find support at 1.2877, Thursday’s low and resistance at 1.3120, the peak of June 27.
The U.S. Department of Labor stated that in June, the economy added 287,000 jobs, compared to the anticipated 175,000. In May, the number of jobs created surged by 11,000, whose number was reviewed from a prior projected increased of 38,000.
The report also indicated that the unemployment rate marked up to 4.9 percent last month from 4.7 percent in May, compared to the anticipated 4.8% increase.
Temporarily, average hourly earnings increased 0.1 percent the previous month, discouraging anticipations for a 0.2 percent increase and after the 0.2 percent upsurge in May.
The report occurred a day after statistics revealed that the number of persons filing for initial unemployed benefits in the week ending July 2 dropped, whereas payroll processing firm ADP stated non-farm private employment increased more than projected in June.
In Canada, official statistics presented that the number of employed people in Canada dropped by 700 in June, confounding anticipations for an upsurge of 5,000 and after a 13,800 increased the prior month.
Canada’s unemployment rate marked down to 6.8 percent the previous month from 6.9 percent in May, beating beating the anticipated 7.0 percent increase.
The loonie was down compared to the euro, with EUR/CAD advancing 0.23 percent to 1.4417.
Dollar vs. Yen
On Monday, the greenback increased over 1 percent compared to the yen as Japanese stocks led the rally in Asian markets, over strong U.S. jobs report and as hopes for extra economic stimulus in Japan linger.
USD/JPY hit a peak of 101.95, previously at 101.91, increased 1.3 percent for the day. The pair had dropped to 99.97 in the wake of Friday’s jobs report.
EUR/JPY advanced 1.22 percent to 112.43.
Japan’s Nikkei increased 3.98 percent, following Prime Minister Shinzo Abe’s ruling coalition majority win on the upper house parliamentary elections on Sunday.
The victory for Abe’s coalition fed expectations for a fresh package of stimulus gauges to spur economic development.
Amount of risk had already been increased following statistics on Friday presenting that the U.S. economy added 287,000 occupations in June, beyond the 175,000 occupations forecasted by economists.
The strong anticipation on the occupations report specified that the economic recovery is back on track.
However, the statistics slightly changed the view that the Fed will stick to its interest rate plans following the slump of May’s payrolls to 11,000, the lowest monthly increase since 2010.
The euro inched lower compared to the dollar, with EUR/USD falling 0.2 percent to 1.1027, not far from Friday’s two-week declines of 1.1001.
The pound also glided lower, with GBP/USD easing 0.15 percent to 1.2933, not far from its post-Brexit decline of 1.2794 scheduled last Wednesday.
Investors look forward to the result of the Bank of England policy meeting later in the week.
The Bank of England could possibly reduce the monetary policy to cushion the U.K. economy from the effect of Brexit, that would also pressure sterling lower.
The U.S. dollar index, that gauges the greenback’s strong point compared to a trade-weighted basket of six major currencies, increased 0.32 percent at 96.62.
Get the latest market updates from FSM News. Subscribe to our daily newsletter for free updates.