USD/CAD falls to session lows after weaker than projected NFP

US dollar slid to a session low against its Canadian counterpart on Tuesday, as the US private sector added fewer than expected jobs in September, which boosted speculations that the Federal Reserve Bank will probably keep the current pace of its stimulus program.

USD/CAD reached a session low at 1.0283 at 12:30 GMT, after which consolidation followed at 1.0299, dipping 0.04% for the day. Support was likely to be received at October 18th low, 1.0277, while resistance was to be met at October 17th high, 1.0332.

It became clear, according to data by the US Department of Labor, that employers in the country added fewer than projected job positions in the month of September, suggesting that new hiring slowed down. The private sector added 148 000 jobs in September, below preliminary estimates of 180 000 positions, and following the revised 193 000 new jobs in August up from 169 000 previously. This report came out three weeks after its initial release date, due to the partial government shutdown. Because of its delay, it is not likely to provide sufficient information about the US labor market tendency, but however, the experienced fiscal standoff has managed to influence companies decisions over whether to hire new employees or not.

At the same time, the rate of unemployment in the United States ticked down to 7.2% in September, marking its lowest level since November 2008, from 7.3% a month ago.

The average hourly earnings increased 0.1% in September on a monthly basis, following the revised up 0.3% gain a month ago, while analysts had expected a 0.2% increase in September.

Following the above mentioned weaker than expected data points, the Federal Reserve Bank will probably delay the first reduction of its asset purchases until March 2014, according to the median estimate of 40 experts in a survey by Bloomberg News. Poll’s results in September showed that the first cut of stimulus would occur in December.

Meanwhile, the loonie, as Canadian dollar is also known, gained strength, after Canadian retail sales increased for a second month in August, matching a record set three months earlier. Retail sales rose 0.2% to reach 40.32 billion CAD in August compared to July, following the revised down 0.5% gain during the preceding month, while preliminary estimates pointed a 0.3% gain. Increased sales of food and clothing have been the main factor behind the overall result. However, curbed demand for new automobiles and weaker sales at gas stations neutralized to some extent this effect.

In addition, the Royal Bank of Canada is expected to revise down its growth outlook for Canada, after Senior Deputy Governor Tiff Macklem said earlier in October, that the nation’s economy will expand at a slower pace than initially projected. Nations central bank will probably maintain its benchmark interest rate at 1%, according to the median estimate of 22 economists participated in a survey by Bloomberg.

Elsewhere, the Canadian currency was lower against the euro, with EUR/CAD cross advancing 0.35% on a daily basis to trade at 1.4149. GBP/CAD pair was gaining 0.10% to trade at 1.6659.