The dollar slipped Friday morning off worse-than-expected nonfarm payroll numbers for November. Oil prices jumped as OPEC reached a deal in Vienna. The Canadian dollar recovered its losses with strong jobs data.
U.S. jobs data takes down dollar
The nonfarm payroll numbers for November came out much lower than expected, adding 155,000 jobs instead of the 198,000 expected.
The November numbers are also significantly lower than the revised 237,000 jobs added in October. The number was reduced from the previous reading of 250,000.
The slowdown in job growth gives more reasoning to the recent considerations by the Federal Reserve to slow its pace of interest-rate hikes.
Unemployment for November remained at historic lows of 3.7% and wage growth continued to grow at a steady 3.1%.
The dollar temporarily slipped against its peers. EUR/USD briefly shot up to 1.138 from 1.136. But the most significant drop was against the Canadian dollar.
USD/CAD reverses course
The poor U.S. jobs data compounded with strong Canadian jobs data has the USD/CAD pair dramatically changing course Friday.
USD/CAD was at 18-month highs Wednesday and Thursday, but the miss in U.S. non-farm payrolls caused the pair to dive below 1.330.
Statistics Canada announced that the nation had added 94,100 jobs in November, compared to estimates of 11,000 and much more than the 11,200 in October.
Canada’s unemployment rate also dropped from 5.7% to 5.6%.
The combination of events helped the loonie recover its two days of losses. The Canadian dollar is also being helped by rising oil prices Friday morning.
Oil jumps 5%
A barrel of West Texas Intermediate and Brent crude spiked Friday morning when OPEC and Russia agreed to a production cut.
OPEC and its allies like Russia will curb oil production by 1.2 million barrels per day, with OPEC contributing to 800,000 barrels of the cuts.
Brent crude rose to above $63 per barrel and WTI hit $53.9.
Oil prices have been trending lower since the beginning of October and a production cut has been talked about by the oil-producing nations – much to the chagrin of President Trump, who wants lower oil prices.
The production cut and consequential spike in prices is adding to a good day for the commodity-linked Canadian dollar.
Brexit vote next week
With all this talk about oil and jobs, you probably thought we forgot about Brexit. How could we?
There is a looming vote in Parliament on Tuesday that has to go through a few groups before approval.
There is optimism in the markets that Theresa May’s deal with the E.U. will get passed as many fear not passing it means the U.K. will crash out of the U.K. (hard Brexit) on March 29.
The pound remained steady Friday around the 1.27 midpoint, even as reports that May was looking to postpone the vote surfaced. Downing Street denied that effort.