CAD skyrockets as investors react to the Canadian Employment report

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar             1.2475-1.2575

Euro                     1.4450-1.4550

Sterling                1.7050-1.7150

The US Dollar Index is marginally weaker this morning as Asian stock markets moved a little higher as the Chinese economy restarted after a week's holiday. Today all eyes will be on the US jobs report for September where it is expected that the economy will have created close to 500K new jobs, any number near that should give the US Federal Reserve enough information to start to taper their stimulus program when they meet in November. US 10-year interest rates where trading higher again last night so the market is clearly expecting the Fed to look to cut the stimulus program in the coming weeks.

The Canadian Dollar was able to extend some gains last night as USD.CAD opens the day at the 1.2530 (0.7981) level which is a new recent low for the currency pair. Once again the Loonie has been able to extend its strength on the back of higher energy prices with the WTI oil price almost hitting $80 last night.

We also get the Canadian Employment report for September this morning and our market is expecting 65K jobs to have been created. With the vast numbers of businesses looking for employees it is hard to imagine that this number won’t be higher than expectation but that remains to be seen. A strong US number alongside a strong Canadian number should be enough to push USD.CAD below 1.2500 today.

As I write the Canadian Employment report showed 157K new jobs to have been created last month and as expected the Canadian Dollar has started to rally.

The US Dollar is trading weaker as the US only created 194K new jobs last month so that may hinder any further strength in the US Dollar today, I don't think it will be enough to slow the Federal Reserve in November but it will be interesting to see what the stock market does today.