After an unexpected increase in the Non-Farm Payrolls report for November, as well as a drop in the Unemployment Rate, the Canadian dollar gained intensively from the safety bet US currency. Just as had been the case in the waning hours of last week’s currency trades, a technical correction starts this week’s exchanges. The Greenback looks poised to pare its losses opposite the Loonie today.
Trade sentiment in the European markets propose a likely direction to the New York session’s exchanges, after Prime Minister Mario Monti announced that he intends to step down before his term ends. Political uncertainty from Italy weighed on the markets, especially as the move comes after the party of former Prime Minister, Silvio Berlusconi, withdrew its support for Monti’s technocratic government.
Bloomberg reports that Mr. Monti will try to corral his coalition, which includes his predecessor Silvio Berlusconi’s People of Liberty Party, for a vote to pass budget legislation before handing in his “irrevocable resignation,” national President Giorgio Napolitano’s office said in an e-mailed statement on December 8.
Turning the focus back to North America, US payrolls climbed by 146,000 following a revised 138,000 increase in October, according to Labor Department figures. The jobless rate likewise fell to 7.7 percent as the labor force shrank. The USDCAD dove 57 pips as a result of the fundamental data, but soon thereafter climbed back up to close at 0.9907. To start off the week’s trades, the currency pair opened at 0.9870 and attempted to extend the risk rally to as low as 0.9863, but has since then made a move to correct bullishly. More bullish price action is projected today for the Greenback-Loonie on the lack of support for another risk rally in the markets.
A buy bias is advised for the USDCAD today. Though be cautious of likely technical price corrections.
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