The U.S. dollar rose to three-and-a-half year highs against the Canadian dollar on Wednesday, after data showed that the U.S. private sector added the largest number of jobs since November 2012 last month.
USD/CAD rose to 1.0829 during early U.S. trade, the strongest level since 25 May 2010, and was last up 0.35% to 1.0803.
The pair was likely to find support at 1.0760, the session low and resistance at 1.0852, the high of May 25, 2010.
ADP nonfarm payrolls rose by 238,000 in December, easily surpassing expectations for an increase of 200,000. November’s figure was revised up to a gain of 229,000 from a previously reported increase of 215,000.
The strong data bolstered the outlook for the recovery in the labor market going into 2014 ahead of Friday’s keenly anticipated jobs report for December.
Investors were also looking ahead to the minutes of the Federal Reserve’s December meeting, due for release later in the session, for indications on the possible timing of further reductions in the bank’s stimulus program.
The Canadian dollar remained under pressure after the country’s Ivey purchasing managers index dropped to a 35 month low on Tuesday, unexpectedly slipping into contraction territory.
A separate report showed that Canada posted an unexpectedly large trade surplus in November.
Elsewhere, the loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD up 0.26% to 1.4693.
In the euro zone, data on Wednesday showed that the unemployment rate in the region remained unchanged at 12.1% in November, while euro zone retail sales rebounded strongly in November.
Retail sales rose 1.4% in November, the biggest rise since November 2001 Eurostat said, recovering from a 0.4% fall in October.
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