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Soft Canadian jobs combine with strong US wage growth
USD/CAD jumped to 1.3175 from 1.3115 after simultaneous jobs report from the United States and Canada.
The US report was mixed with a slight beat on the headline but poor revisions. The participation rate slipped but the market focused on strong wage growth as average hourly earnings rose 0.4% compared to 0.2% expected. Breaking that down further, it was only 0.37% overall and but more importantly it was up 0.31% for production and non-supervisory workers, which is where wage growth has been stagnating.
That put a broad bid into the US dollar as it rose across the board.
At the same time, Canadian employment missed badly with a -51.6K reading on jobs compared to +5.0K expected. That was mitigated by a jump in full-time jobs and large drop in part-time employment. However, once again wages were the market focus with hourly earnings for permanent employees up 2.6% vs 3.0% expected.
USD/CAD has since faded back to 1.3165 as the market ponders the chances of a NAFTA deal on the weekend. There have been some positive signs but a Canadian official said a deal was unlikely to be agreed before the weekend.
The optimism rose late yesterday after Trump said he believed Canada will be a part of the deal at a rally in Montana.