USD/CAD recovers to near 1.3750 ahead of Canadian employment data

FXStreet
Updated
Mitrade
coverImg
Source: DepositPhotos

■  USD/CAD edges higher to near 1.3740 in Friday’s early Asian session. 

■  The US Dollar recovery is bolstered by the upbeat US Initial claims last week. 

■  The Canadian employment data will be in the spotlight on Friday. 


The USD/CAD pair trades with mild gains near 1.3740, snapping the five-day losing streak during the early Asian session on Friday. The uptick of the pair is supported by the firmer US Dollar (USD) after the upbeat Initial Jobless Claims. 

Initial claims for unemployment insurance came in less than expected last week, easing some fears about the US labor market. Data released by the Department of Labor showed on Thursday that the initial jobless claims for the week ending August 3 increased by 233,000, compared to 250,000 in the previous week (revised from 249,000), below the consensus of 240K. The upbeat reading provides some support to the Greenback against the Loonie. 

The markets remain expecting a strong probability of a half percentage point reduction for the first move and a full percentage point cut by the end of the year. According to the CME FedWatch Tool, traders have priced in 57.5% odds that the Federal Reserve (Fed) will cut 50 basis points (bps) at the September meeting, down from 83% earlier this week. A deeper Fed rate cut expectation is likely to limit the pair’s upside in the near term. 


On the CAD’s front, the Bank of Canada (BoC) decided to cut interest rates at its July meeting to 4.5%, hinting at further easing of monetary policy where appropriate. BMO and CIBC analysts forecast a further rate reduction of 75 bps in 2024, or a quarter-point cut at each remaining meeting this year. However, traders will take more cues from the key Canadian employment report, which is due later on Friday. The Canadian economy is projected to add 22.5K jobs in July, while the Unemployment Rate is forecast to rise to 6.5% in July from 6.4% in June. 

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
Forex Today: Powell and the US NFP will be in the limelightThe Greenback tumbled to multi-month lows as market participants digested President Trump’s newly announced reciprocal tariffs, all against a backdrop of sharp losses in global stock markets and escalating concerns over a global trade war.
Author  FXStreet
33 mins ago
The Greenback tumbled to multi-month lows as market participants digested President Trump’s newly announced reciprocal tariffs, all against a backdrop of sharp losses in global stock markets and escalating concerns over a global trade war.
placeholder
USD/CAD attracts some buyers above 1.4250 as Trump unveils tariff plansThe USD/CAD pair attracts some buyers to near 1.4275, snapping the two-day losing streak during the late American session on Thursday.
Author  FXStreet
Yesterday 01: 10
The USD/CAD pair attracts some buyers to near 1.4275, snapping the two-day losing streak during the late American session on Thursday.
placeholder
USD/CAD Price Forecast: Slides for third straight trading dayThe USD/CAD pair extends its downside move for the third day in a row on Wednesday and slides to near 1.4250.
Author  FXStreet
Mar 26, Wed
The USD/CAD pair extends its downside move for the third day in a row on Wednesday and slides to near 1.4250.
placeholder
USD/JPY Price Forecast: Rebounds but struggles at 150.00 amid bearish pressureThe USD/JPY advances some 0.17% late during the North American session, yet it remains shy of the 150.00 figure after slumping to a new year-to-date (YTD) low of 148.09.
Author  FXStreet
Mar 05, Wed
The USD/JPY advances some 0.17% late during the North American session, yet it remains shy of the 150.00 figure after slumping to a new year-to-date (YTD) low of 148.09.
placeholder
US Dollar Price Forecast: Remains capped below the 100-period EMA near 106.50The US Dollar Index (DXY) rebounds to around 106.50 during the early European session on Wednesday.
Author  FXStreet
Feb 26, Wed
The US Dollar Index (DXY) rebounds to around 106.50 during the early European session on Wednesday.