The CAD to USD rate went through a decline this week, as Jerome Powell confirmed rate cuts, sending USD/CAD 2 cents lower. But, the decline stalled at moving averages on the daily chart, which held as support and yesterday the price bounced higher in the US session, after the employment reports from the US and Canada.

USD/CAD Daily Chart – Moving Averages Held As Support

The NoN-Farm Employment Payrolls (NFP) showed that United States saw improved job growth in February after experiencing a decrease in the previous months. However, the unemployment rate jumped 2 points to 3.9%, while pay growth remained modest at 0.1%, which is the lowest in a year.

In contrast, Canada’s key employment statistics showed stronger performance, with a notable increase of 40.7 thousand jobs. The majority of the employment growth in Canada was in the full-time category, with an addition of 70.6 thousand jobs, while part-time positions decreased by approximately 30,000. However, USD/CAD ended lower at the end of the day.

Initially, the USD/CAD currency pair declined in response to the employment data but later bounced after reaching a low of 1.3420, where this pair met the 50 SMA (yellow) and the 200 SMA (purple), which held as support on the daily chart. The price bounced 80 pips higher, forming a bullish reversing pattern, so next week we will be looking to buy USD/CAD.

Canadian February 2024 Jobs Report

Canada employment change highest since September 2023

• Canada February employment change 40.7K versus 20.0K estimate. Highest since September 2023.
• January employment change was 37.3K
• Unemployment rate 5.8% vs 5.8% estimate
• Prior unemployment rate was 5.7%.
• Full-time employment 70.6K vs -11.6K last month.
• Part-time employment -29.9K vs. 48.9K last month.
• Average hourly wages permanent employees 4.90% vs 5.30% last month.
• Participation rate 65.3% versus 65.3% last month

In February, Canada’s employment change exceeded expectations, with a gain of 40.7K jobs compared to the estimated 20.0K. This marks the highest increase since September 2023. The unemployment rate remained steady at 5.8%, in line with expectations, with the prior month’s rate at 5.7%. Full-time employment saw a substantial increase of 70.6K, contrasting with a decrease of 11.6K in the previous month.

However, part-time employment declined by 29.9K, following an increase of 48.9K in the prior month. Average hourly wages for permanent employees rose by 4.90%, slightly lower than the 5.30% recorded in the previous month. The participation rate remained unchanged at 65.3%, consistent with the previous month.

USD/CAD Live Chart