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The Canadian dollar lost partial strength during the week, up until the surprise Canadian unemployment released on Friday. There were 43,000 more Canadians working in January, according to Statistics Canada, about three times more than what economists were expecting. The unemployment rate fell to 8.3 per cent from a revised 8.4 per cent in December. The results were better than the expectations of economists, who were calling for 15,000 additional people working last month and a jobless rate of 8.5 per cent. From a technical point of view, overall market momentum had more of an effect on the USD/CAD sending it higher towards the end of the week. Even though Dollar strength could persist, the 200 day moving average should provide resistance for the USD/CAD, especially as indicators are pointing towards minor divergence.

The Australian dollar was also hammered after the RBA surprised the market by leaving its benchmark rate unchanged at 3.75% saying it needed more time to judge the effects of the previous three rate hikes. The decision defied the expectations of all economists surveyed and sent 1-month T-bills yields up some 15 basis point. Governor Stevens noted lenders had increased borrowing costs by about 1% compared with the RBA’s 75 basis point of hikes. The RBA also made reference to Chinese moves to reduce the degree of stimulus in their economy and credit conditions in the major countries. To date the AUD/USD is sitting on its 200 day moving average. A close below this level should bring further technical selling in the currency pair.