FX Headlines: Canadian Dollar Rallies Against All Major Currencies as Employment Tops Expectations

http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/top_fx_headlines/2011/01/07/Canadian_Dollar_Rallies_Against_All_Major_Currencies_as_Employment_Tops_Expectations.html

Fundamental Headlines

• In Europe, Angst Fills Sovereign Bond Gap – Wall Street Journal

• Wall Street Banks Win China Approvals – Wall Street Journal

• Traders Eye U.S. Nonfarm Payroll Data – Financial Times

• Employment in U.S. Probably Grew as Economy Strengthened – Bloomberg

• German Recovery Widens as Retail Rises Most in Five Years – Bloomberg

USDCAD: Canada’s net change in employment jumped 22.0K in December after climbing 15.2K the month prior amid economists’ expectations of 20.0K. At the same time, the unemployment rate remained unchanged at 7.6 percent. Taking a look at the breakdown of the report, full time employment change jumped 38.0K to mark the highest reading since October, while the part time component pushed lower, a sign that companies are becoming more optimistic about the economic recovery. The reading bodes well for Canada and will likely keep interest rate expectations above 5 percent. Taking a look at the currency markets, the loonie rallied against all of its major counterparts. Going forward, currency traders will closely monitor the CADJPY as the pair looks poised crossover above the 200-day moving average which has served as a line of resistance since June 23rd 2010. A break above this area will expose the 86 area in the medium term. Market participants will now shift their focus to the U.S. nonfarm payrolls report.

Written by Michael Wright, Currency Analyst

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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast

DailyFX provides forex news on the economic reports and political events that influence the currency market.
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