• EUR/CAD  -1.4%
• EUR/USD  -0.9%
• CAD/JPY  +0.8%

EUR/CAD

Canadian Jobless At 32-Year Low: Canada continues to benefit from robust fundamentals.  While the usual correlation between the loonie and commodity prices unhinged, scheduled economic indicators took control. This morning, Statistics Canada reported the lowest unemployment rate the country has seen in 32 years. The jobless rate printed lower than expected at 6.3% against 6.4% expected. The Canadian central bank is meeting conflicting signals with this release.  Appreciation in the loonie in recent months, along with lower growth in domestic demand, suggests minor inflationary pressures. However, with Canadians realizing more jobs and higher wages, consumer driven price growth could be just around the corner.  On the other side of the pair, the Euro continues to slide against all the major currencies after Jean Claude Trichet dropped a grenade in the euro longs field, leaving no doubt that another rate hike in May is clearly not on the ECB's agenda.

Rumorville: Bidding interest resides below the 1.3875 with comparative offers above at 1.40 and 1.4105. Looking ahead, a move below 1.3750, March 9th support may open the door for a move as low as 1.36.

EUR/USD

Job Growth And Dollar Signs: Like its Canadian counterpart, U.S. employment expanded at a firm pace in March with payrolls rising 211,000 and household employment up a massive 385,000 for the month.  With the additional jobs, the unemployment rate in the world's largest economy sank to 4.6%.  The initial reaction to the bullish employment report was quick and momentous, but overall the first in a series of dollar bids. At 10 AM ET, coinciding with expiration of OTC options, the dollar rallied  an additional 75 pips against the euro. On Thurday the ECB disappointed the Market, when Trichet clearly indicated that the ECB was out of synch with the markets that had priced a 90% probability of a move in May, triggering a considerable rally in Euribor futures and bringing down the world most liquid currency pair.

Rumorville: Buying pressure resides at the 1.21 figure wich is the 61.8% retracement of 1.1955-1.2330. Should selling momentum crunch through, dollar bulls may found some resistance on 1.2050, the 200 day moving average.

CAD/JPY

The Oil Pair Eyes Rate Differentials: Along with the stong employment numbers, another volatile day in oil futures pits helped the loonie to squeeze another 93 pip advance against the Japanese yen.  Canada claims the title of the ninth largest crude oil producer and the second largest reserves holder in the world. However, the correlation betweent the commodity and this currency pair may take a backseat to fundamental releases.  Therefore, any short yen position should be considered carefully. Deflationary risk is vanishing in the world's second largest economy with consumer prices holding in positive territory for the past two months causing interest-rate speculators to flood into yen-backed pairs in droves. Japanese official reserve assets for March rose to a record high of 852 Bn from 850.1Bn in the last month and the Japanese Finance Minister, Tanigaki, hinted that any change in the composition of the country's foreign reserves would be made carefully.

Richard Lee is a Currency Strategist at FXCM.