Canadian Dollar Update – Canadian dollar extending Friday’s rally

• Canadian jobs reports boosts Loonie
• Central bank meetings this week include Fed, BoC, RBA and SNB
• US dollar trading defensively

USDCAD open: 1.3825, overnight range 1.3804-1.3836, close 1.3818, WTI 59.50, Gold 4203.60

The Canadian dollar soared on Friday following the stronger-than-expected Canadian employment data. Canada gained 53,600 new jobs in November on top of the 66,000 gain in October. Economists said the data ensured that the BoC will leave rates unchanged on Wednesday, with many suggesting that the next rate move will be a rate hike.

FX markets are trading cautiously ahead of a series of central bank meetings this week.  The RBA kicks things off tomorrow followed by the BoC and FOMC on Wednesday.

Asian equity markets ended mixed, with Japan’s Topix rising 0.65%, Australia’s ASX 200 slipping 0.18%, and Hong Kong’s Hang 2eng falling 1.23%.
As of 7:30 am, the German DAX is up 0.21%, the French CAC-40 is down 0.16%, and the FTSE 100 is unchanged. S&P 500 futures are up 0.13%, the DXY is at 98.97, and the U.S. 10-year yield sits at 4.146%.

EURUSD traded in a 1.1638–1.1672 range, with the pair showing little reaction to stronger-than-forecast German industrial production of 1.8% for October. Support for the currency came from comments by Isabel Schnabel, who noted that markets and surveys still anticipate the next ECB move to be a rate hike, even if it is not imminent, a view she said she is comfortable with.

GBPUSD moved inside a 1.3314–1.3346 band and slipped toward the low end of that range in New York as traders wait for new catalysts. Markets are marking time ahead of the FOMC decision and the Bank of England meeting on December 18.

USDJPY traded in a 154.90–155.55 span, swinging on mixed domestic data. Wage growth of 2.6% m/m increased speculation that the Bank of Japan may opt for a rate hike this month, but that optimism was tempered by Q3 GDP contracting more than expected at -0.6% q/q.

AUDUSD traded in a 0.6631–0.6650 range, extending Friday’s advance ahead of the Reserve Bank of Australia’s policy announcement. The RBA is widely expected to hold rates with a hawkish tone, a stance that contrasts sharply with expectations for a 25 bp cut from the Federal Reserve.

There are no Canadian or U.S. economic reports of note today.