USD/CAD Climbs to Three-Week High as Jobs Data Diverge

USD/CAD rose 0.6% on Friday to trade at 1.4100, a three-week high, extending its two-day advance to roughly 1%. The U.S. Dollar strengthened broadly after a hotter than expected October Nonfarm Payrolls report showed 165K jobs added, roughly 100K above expectations, with the unemployment rate falling to 4.1%. The Canadian Dollar faced the opposite picture. Canada’s October employment report, released at the same time, showed a net loss of jobs and the unemployment rate climbing to 6.7%.

The simultaneous releases sharpened the policy divergence between the two central banks. Markets now price a 76% probability of a Federal Reserve rate hike in December, while odds of a Bank of Canada hike fell to 33%. With labor markets moving in opposite directions on each side of the border, today’s move reflects a widening relative rate story rather than USD strength alone.

USD/CAD Daily Price History

In the above chart, USD/CAD is pressing above the psychologically important 1.4100 level after more decisively clearing a cluster of the daily 20-, 50-, and 100-day EMAs (exponential moving averages) near 1.4050. The Canadian Dollar’s strong October gave way to a tight consolidation with USD/CAD holding below 1.4000, and CAD’s failure to build meaningfully on those gains suggests today’s breakout is more likely to open the range toward 1.4200 than lead to a test of new lows. The short-term bear case is that this data-driven pop proves less durable with one more month of data due before December’s policy decisions. A return below the EMA cluster near 1.4050 would suggest USD/CAD remains stuck in its three-week range.

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