USD/CAD on fresh highs after downbeat Canadian employment report

US dollar rose to fresh session highs against its Canadian counterpart on Friday, as Canadian employers unexpectedly closed job positions in July, while unemployment rate rose.

USD/CAD jumped to its highest point today at 1.0351 at 13:26 GMT. Support for the pair was expected at current session low, 1.0287, while resistance was likely to be encountered at August 7th high, 1.0443.

Earlier today it was reported that employment in Canada unexpectedly lowered during July, after countrys public sector lost a record number of job positions, which led to an increase in unemployment rate and bolstered expectations that Canadian central bank will leave the base interest rate at current low levels. The Bank of Canada has maintained its benchmark interest rate objective at 1% since September 2010 in order to spur growth. Economy eliminated 39 400 jobs in July, marking the second monthly decrease and the most considerable one since March this year. In June economy lost hardly 400 jobs, while preliminary estimates pointed that 10 000 new job positions will be added. Unemployment rate, in the mean time, rose to 7.2% in July from 7.1% in June. Analysts had expected that unemployment will remain stable.

“We’ll end the day with Canada dollar cheaper than it started the day,” said Adam Cole, head of G-10 currency strategy at Royal Bank of Canada, by phone from London, cited by Bloomberg. “It’s probably a little bit too soon to say whether the Bank of Canada will get the third-quarter pickup it was looking for. These numbers certainly don’t help, but they don’t seal the case against the third-quarter pickup.”

In addition, the Bank of Canada at its policy meeting on July 17th raised its economic growth forecast to 1.8% during 2013, which was a revision up from 1.5% growth, as was the forecast during April.

Today it also became clear that housing starts in Canada decreased to 192 900 units in July from 193 800 in June, as the latter was a revision down from 199 586 units previously. It was expected that housing starts will decline even more, to 190 000 units in July.

Meanwhile, the greenback was set for a weekly drop, as reports showing the economies of China, Europe and the United Kingdom are stabilizing, pressured the demand for the US dollar during the recent trading sessions.

Elsewhere, the loonie, as Canadian dollar is also known, was trading higher against the euro, as EUR/CAD cross dropped by 0.25% to 1.3790 at 13:59 GMT. GBP/CAD pair was also losing ground, down by 0.18% to trade at 1.6022 at 13:59 GMT.