The U.S. dollar initially rose to three-and-a-a-half year highs against the Canadian dollar on Friday after the release of a stronger-than-forecast U.S. jobs report for November, before erasing gains to end the session lower.
USD/CAD hit session highs of 1.0706 on Friday, matching Wednesday’s highs at strongest level since May 2010, and was last down 0.20% to 1.0632.
The pair is likely to find support at 1.0613, the low of December 2 and resistance at 1.0706.
The U.S. economy added 203,000 jobs in November, above expectations for jobs growth of 180,000, the Labor Department said. The unemployment rate fell to a five year low of 7.0% from 7.3% in October.
The report came one day after official data showed that the U.S. economy grew at an annual rate of 3.6% in the three months to September, well above the preliminary estimate for 2.6%.
The robust data raised the possibility that the Federal Reserve may start to scale back its USD85 billion-a-month asset purchase program as soon as its next monthly meeting on December 17 - 18.
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.
In the week ahead, the U.S. is to release what will be closely watched data on retail sales, while a speech by the BoC Governor Steven Poltz will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, Tuesday and Wednesday as there are no relevant events on these days.Thursday, December 12
Canada is to release data on new house price inflation. BoC Governor Stephen Poltz is to speak at an event in Montreal; his comments will be closely watched.
The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as the weekly report on initial jobless claims.Friday, December 13
The U.S. is to round up the week with data on producer price inflation.
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