USD Gains Strength as US Job Market Surprises with Strong Growth

The US Dollar surged against its Canadian counterpart on Friday as job market data from both countries was released. The USD/CAD pair jumped by nearly 80 pips, or 0.39%, to around 1.3850, with the Greenback receiving a boost from the stronger-than-expected US Nonfarm Payrolls (NFP) report.

The NFP numbers showed that the US economy added 162K jobs in August, exceeding market expectations of a 56K increase and following July's revised 21K gain. This strong showing supported the Greenback against the Loonie. In contrast, Canada's employment report revealed job losses of 41.7K in August after creating 75.1K jobs in July.

The Canadian Dollar was further weakened by slower average hourly wages growth in Canada, which slowed to 2% in August from 3% in the previous month. The unemployment rate remained unchanged at 6.4%, as anticipated. These numbers weighed heavily on the Loonie and amplified the USD/CAD rally.