Investing.com - The U.S. dollar dropped against its Canadian counterpart on Friday, after the release of downbeat U.S. employment data and as a more positive trade balance report from Canada lent support to the local currency.
USD/CAD hit 1.3007 during early U.S. trade, the pair’s lowest since August 30; the pair subsequently consolidated at 1.3010, retreating 0.71%.
The pair was likely to find support at 1.2970, the low of August 29 and resistance at 1.3149, Thursday’s three-week high.
The U.S. Labor Department said the economy added 151,000 jobs in August, disappointing expectations for an increase of 180,000. The number of jobs created increased by 275,000 in July, whose figure was revised from a previously estimated 255,000 gain.
The U.S. unemployment rate remained unchanged at 4.9% this month, confounding expectations for a downtick to 4.8%.
The report also showed that average hourly earnings rose 0.1% in August, below expectations for a 0.2% increase and after a 0.3% gain the previous month.
The weak data dampened expectations for a near-term rate hike, as Federal Reserve officials recently indicated that the pace of interest rate increases will be data dependent.
On a more positive note, the Bureau of Economic Analysis said the U.S. trade deficit narrowed to $39.47 billion in July from $44.66 billion in June, whose figure was revised from a previously estimated deficit of $44.50 billion.
Analysts had expected the trade deficit to marrow to $42.70 billion in July.
Also Friday, Statistics Canada said the country’s trade deficit narrowed to C$2.49 billion in July from C$3.97 billion in June, whose figure was revised from a previously estimated deficit of C$3.63 billion.
Analysts had expected the trade deficit to hit C$3.25 billion in July.
Data also showed that Canada’s labor productivity slipped 0.3% in the second quarter, compared to expectations for a 0.4% decline and after an increase of 0.4% in the three months to March.
The loonie was higher against the euro, with EUR/CAD declining 0.54% to 1.4593.