The Canadian dollar extended gains against the USD

The *US dollar* continued its downward trend against the euro and
pound, falling to a fresh 1-month low against the currencies following
weaker-than-expected U.S. jobs data. The jump in U.S. jobless claims
to their highest level since October dented optimism about the U.S.
economy, exacerbating the dollars losses.

Today's successful Spanish bond auction eased some of the concern
over the debt problems plaguing the euro zone's most-indebted
countries, allowing for some room for the euro to strengthen 1.1%
against the USD.

The *euro* rose against the dollar for a fourth straight day in a
rally that could continue after solid Spanish and Portuguese bond
auctions eased concerns about an escalation of the Eurozone debt
crisis, though some analysts still believe that gains may be limited.
German Finance Minister Wolfgang Schaeuble said yesterday that
Eurozone countries are working on a "comprehensive package", which may
be agreed by February or March, to solve the bloc's debt crisis. The
euro remains vulnerable to selling if debt problems resurface.

The *British pound* climbed to a fresh one-month high against the
dollar as expectations that a rise in UK interest rates may come
sooner than expected. The Bank of England kept rates at a record low
but rising inflationary pressures and higher UK yields have prompted
money markets to price in a strong chance of a rate hike as early as
May.

British industrial output grew in November at its slowest annual pace
since July, despite ongoing strength in manufacturing. Manufacturing
output grew slightly faster than forecast, matching October's monthly
rate of 0.6% which was the strongest since March.

The *Japanese yen* continues to trade within recent ranges against the
majors.

The *Canadian dollar* extended gains against the USD, despite a weak
U.S. employment data report. Signs of stronger growth in the United
States, the destination for most of Canada's exports, have helped
the Canadian dollar higher in recent weeks.
Many traders believe that as long as oil continues to rise and the
U.S. economy regains some footing, you should see some more selling of
euro and buying of Canadian dollars.

The *Mexican peso* firmed to its strongest levels since October 2008
after solid demand at a Portuguese government debt auction eased
concerns about Europe's debt crisis, boosting riskier assets.

The *Australian dollar* managed to stay afloat despite worse than
forecast jobs data which saw December jobs increase only 2.3k compared
to the 25k expected increase. Though floods are still pressuring the
currency and economy lower, new jobs will be created to assist in the
cleanup of the destruction.
Source: Fxstreet.com