USD/CAD edges higher during late US session after US, Canadian employment reports

US dollar traded higher and in proximity to two-month highs during the late phase of US session, following the upbeat non-farm payrolls report out of the United States and another better than projected employment report out of Canada for October, but however, US consumer confidence was reported to have dropped unexpextedly in November.

Having touched its highest point since September 3rd at 1.0502 at 14:23 GMT, USD/CAD closed at 1.0478 on trading Friday, gaining 0.20% on a daily basis. Support was likely to be received at November 7th low, 1.0406, while resistance was to be seen at September 3rd high, 1.0560.

According to data by the Bureau of Labor Statistics, employers in the United States unexpectedly added more job positions than projected in October. Non-farm payrolls increased by 204 000 in October, well above the expected 120 000 new jobs and above the revised up number of 163 000 jobs, added in the previous month (the figure was 148 000 previously). Augusts result has also been revised up to 238 000 jobs from 193 000 job positions previously. Octobers figure suggested that nation’s labor market has probably become resilient enough, so that the Federal Reserve Bank could begin to scale back the pace of its monthly asset purchases soon.

At the same time, the rate of unemployment in the country, evaluated on the basis of another survey, increased to 7.3% in October, in line with expectations, from 7.2% in September. The major factor behind this higher rate have been the government workers, taking a temporary leave due to the 16-day partial shutdown throughout the month. They have been classified as jobless during the survey period, despite the fact they have begun working again later in October.

The average hourly earnings in the US climbed 0.1% in October on a monthly basis, retaining the pace, showed in September, while experts had anticipated a 0.2% gain.

However, following these optimism-boosting reports were the results of a survey on consumer confidence by Thomson Reuters and the University of Michigan, which pointed that sentiment among consumers in the United States weakened at the start of November, reaching its lowest level in the past two years. The preliminary value of the index, gauging consumer confidence, fell to 72.0 in November, or the least since December 2011. The final reading of this index for October was 73.2, with this result mostly influenced by the partial shutdown in the country. Experts had anticipated that the confidence index will improve to 74.5 in November, partially neutralizing the drop registered a month ago.

Consumerspersonal expenditures rose 0.2% in September compared to a month ago, meeting preliminary estimates. On the other hand, personal income rose 0.5% in September, which exceeded the expected 0.3% gain, with September being the third consecutive month, during which the climb rate of income outstrips the climb rate of expenditures. This tendency might be another confirmation of US consumers’ wariness, when it comes to spending.

Meanwhile, in Canada, it became clear that economy added more jobs than expected in October, while the rate of unemployment remained at a five-year low. Crucial for the overall result has been the higher number of the employed people in the public sector and tourism, which appears to have compensated the generally weak performance of countrys private sector. Canadian employers added 13 200 new job positions in October, following a figure pointing 11 900 new jobs in the preceding month. Analysts at Royal Bank of Canada had predicted that economy will add 11 000 jobs in October.

In addition, the unemployment rate in the country remained unchanged at 6.9% in October, while preliminary estimates pointed an increase to 7.0%.

A separate report showed that housing starts in Canada increased to 198 282 units in October, beating the revised up number in September, 195 929 units, or up from 193 637 units previously. Experts had expected that the number of housing starts will slow down to 190 800 units in October.

Elsewhere, after having reached a daily low at 1.3978 at 15:27 GMT, EUR/CAD cross closed at 1.4002 on Friday, down 0.24% for the day. GBP/CAD pair distanced from a session low at 1.6746, recorded at 15:39 GMT, to close the week at 1.6779, losing 0.32% on a daily basis.