USD/CAD Breaks C$1.3400 after Weekly US Jobs, Durable Goods Beat
- August US Durable Goods decline by -2.0% versus -2.2% expected (m/m).
- Latest weekly US Jobless Claims decline again, with four-week average at 15-year low.
- USDCAD continues its strong run this morning through C$1.3400.
In what was arguably the most important batch of data released this week, Thursday’s pre-market weekly US jobs data and the August US Durable Goods Orders report lived up to the hype. Initial Jobless Claims, perhaps the most timely gauge of US labor market health currently available, slumped once more. The four-week jobless claims average fell as well, to a 15-year low; this data certainly fits in with the narrative that the US labor market continues to strengthen and that the Federal Reserve should look to raise rates.
The consumption data due out at 12:30 GMT wasn’t necessarily good, but it was better than expected. The headline August Durable Goods Orders figure coming in at -2.0% versus -2.2% expected (m/m), but a closer look at the data reveals that much of the decline was driven by a slowdown in orders for automobiles and aircraft. Perhaps the most worrying aspect of the report was that core capital goods orders, the figure used when determining the quarterly GDP rate, slipped by -0.2% (m/m).
Here’s the mixed batch of data that’s causing minor gyrations in the US Dollar this morning:
- USD Durable Goods Orders (AUG): -2.0% versus -2.2% expected, from +1.9% (m/m).
- USD Durables ex Transportation (AUG): 0.0% versus +0.1% expected, from +0.4% (m/m).
- USD Initial Jobless Claims (SEP 19): 267K versus 272K expected, from 264K.
- USD Continuing Claims (SEP 12): 2242K versus 2240K expected, from +2243K.
USDCAD5-minute Chart: September 23 to 24, 2015
Ahead of the data, USDCAD was trading at C$1.3383, having staged a considerable rally overnight from its lows just above C$1.3300. After the data, with the view embraced that the US economy would at a similar pace to what we’ve seen in recent months, USDCAD climbed to as high as C$1.3416. At the time this report was written, USDCAD was trading back down at C$1.3404.
--- Written by Christopher Vecchio, Currency Strategist
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