The U.S. dollar rose to session highs against the Canadian dollar on Monday as Friday’s stronger-than-forecast U.S. jobs report indicated that the economic recovery is gaining traction.
USD/CAD was up 0.29% to 1.0664 from 1.0637 on Friday, re-approaching the three-and-a-half year high of 1.0706 struck on Friday.
The pair was likely to find support at 1.0625 and resistance at 1.0706.
The U.S. economy added 203,000 jobs in November, well above expectations for jobs growth of 180,000, the Labor Department said. The unemployment rate fell to a five year low of 7.0%.
The data bolstered optimism over the outlook for the U.S. economic recovery and reinforced expectations that the Federal Reserve will start scaling back its USD85 billion-a-month asset purchase program at one of its next few meetings.
In Canada, data on Friday showed that the economy added 21,600 jobs in November, far more than the 12,000 forecast by economists. The unemployment rate was steady at 6.9%.
However, the Canadian dollar remained under pressure amid concerns that the subdued inflation outlook may prompt the Bank of Canada to keep interest rates on hold for longer.
Data released on Monday showed that Canadian housing starts rose by 192,200 units in November, below expectations for a gain of 195,000.
Elsewhere, the loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD advancing 0.41% to 1.4632.
In the euro zone, data on Monday showed that Germany''s trade surplus narrowed in October as imports grew faster than exports.
The data came a day after a report showed that Chinese exports rebounded strongly in November, adding to hopes that global demand is picking up.
The euro shrugged off a report showing that German industrial production unexpectedly declined by 1.2% in October, missing expectations for a 0.8% rise.
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