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Forex - USD/CAD weekly outlook: February 10 - 14

Published 02/09/2014, 07:32 AM
Updated 02/09/2014, 07:32 AM
Canadian dollar higher after strong Canadian jobs report

Investing.com - The U.S. dollar fell to more than two-week lows against the Canadian dollar on Friday after a stronger-than-forecast Canadian jobs report for January dampened expectations for a rate cut by the Bank of Canada.

USD/CAD hit 1.0969, the weakest since January 22 and was last down 0.34% to 1.1031. For the week, the pair was down 0.69%, the worst weekly performance in five months.

The pair is likely to find support at 1.0900 and resistance at 1.1078, Friday’s high.

The Canadian economy added 29,400 jobs last month, Statistics Canada said, after shedding 44,000 jobs in December. It was the largest increase since August and beat expectations for jobs growth of 20,000.

The nation’s unemployment rate ticked down to 7.0% from 7.2% in December.

The data prompted investors to trim back expectations for a rate cut by the BoC at its next policy meeting in March.

Meanwhile, official data showed the U.S. economy added jobs at a slower-than-forecast rate in January.

The U.S. economy added 113,000 jobs in January, the Labor Department said, well below expectations for jobs growth of 185,000, after December's lackluster gain of 75,000 jobs.

It was the weakest two-month stretch of job creation in three years as inclement weather contributed to a slowdown in hiring.

Yet the report also showed that the number of people participating in the labor force edged up to 63% from a 30-year low of 62.8% last month, while the unemployment rate unexpectedly ticked down to a five year low 6.6% from 6.7% in December.

The report was seen as unlikely to derail reductions in the Federal Reserve’s stimulus program. The bank announced a second $10 billion cut to its asset purchase program in January, reducing it to $65 billion-per-month.

In the week ahead, Fed Chair Janet Yellen is to testify to Congress on the bank’s semiannual monetary policy report in Washington. Her comments will be closely watched. U.S. data on retail sales and consumer sentiment 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 and Wednesday, as there are no relevant events on these days.

Tuesday, February 11

Federal Reserve Chair Janet Yellen is to testify on the bank’s semiannual monetary policy report before the House Financial Services Committee, in Washington.

Later in the day, Canada’s government is to release its annual budget statement.

Thursday, February 13

Canada is to release data on new house price inflation.

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. The nation is also to release the weekly report on initial jobless claims.

Federal Reserve Chair Janet Yellen is to testify on the bank’s semiannual monetary policy report before the House Financial Services Committee, in Washington.

Friday, February 14

Canada is to produce data on manufacturing sales.

The U.S. is to wrap up the week with the closely watched preliminary reading of the University of Michigan consumer sentiment index. The U.S. is also to release data on import prices and industrial production.

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