USD/CAD pulled back to the 1.3900 level on Friday, reacting to a weaker-than-expected US Nonfarm Payrolls (NFP) report for October. The data showed only 12,000 jobs added, well below the 113,000 forecast and a marked decline from September’s downwardly revised 223,000. External factors, such as hurricanes in Florida and aerospace strikes, may have impacted the employment numbers, highlighting vulnerabilities in the recent hiring trends.
Despite the weak payroll figure, the Unemployment Rate held steady at 4.1%, and Average Hourly Earnings rose in line with expectations at 4.0%, pointing to ongoing wage pressures in the labor market.
Initially, the data weighed on the US Dollar (USD), but it quickly regained strength, with the US Dollar Index (DXY) attempting to secure a position above the critical 104.00 level. This resilience suggests that while the disappointing jobs number may limit rate hike bets, the steady unemployment rate, and wage growth maintain a supportive outlook for the USD.
Trade Idea:
A break below 1.3900 in USD/CAD could signal further downside, with potential support near 1.3850.