Canadian Dollar Pares Losses As The NFP Dust Settles

Photo by Michelle Spollen on Unsplash

The Canadian Dollar (CAD) has regained some ground during Friday's US trading session. The loonie tumbled on a combination of a stellar US employment report and weak Canadian labor figures to regain lost ground as the impact of the data eased.

US Nonfarm payrolls increased well beyond expectations in March, triggering a bullish reaction on US Treasury yields and the US Dollar. A closer look at the data, however, revealed that the yearly wage growth eased to its lowest rate in years. This has kept hopes of Fed rate cuts alive, despite the hawkish comments by Fed Governor, Michelle Bowman.

In Canada, net employment levels have declined against expectations in March. The negative impact, however, has been offset by the strong improvement of March’s Ivey PMI, which has given some support to the Canadian Dollar.

Daily digest market movers: USD/CAD dips further as US NFP beat expectations

  • The Canadian Dollar has taken back some of the ground lost after the release of the US Nonfarm Payrolls Report although it still remains negative on the daily and weekly charts.
  • US Nonfarm Payrolls increased by 303K in March from 270K in February, well above the 200K forecasted by market experts.
  • Average Hourly Earnings have increased at a 0.3% monthly pace and 4.1% year on year from 0.2% and 4.3% respectively in February.
  • Canadian Ivey Purchasing Managers’ Index has improved to 57.7, its best reading over the last 12 months, from 53.9 in February.
  • Somewhat earlier, Canadian employment data disappointed investors with a 2.2K decline in March after a 40.7K increase in February. The market was expecting a 25K increase.
  • Fed Governor Bowman warns that an additional rate hike will be needed if inflationary pressures remain high.
  • On Thursday, Fed Powell reiterated that the central bank needs more time to decide on rate cuts, while Fed Kashkhari warned that there might not be any rate cut this year, which sent the USD higher.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.

USD   0.02% 0.06% 0.33% 0.07% 0.20% 0.25% -0.01%
EUR -0.01%   0.05% 0.31% 0.06% 0.20% 0.25% -0.02%
GBP -0.06% -0.05%   0.26% 0.01% 0.14% 0.19% -0.08%
CAD -0.33% -0.32% -0.25%   -0.25% -0.13% -0.07% -0.33%
AUD -0.09% -0.07% -0.02% 0.26%   0.11% 0.17% -0.10%
JPY -0.20% -0.18% -0.15% 0.11% -0.14%   0.05% -0.22%
NZD -0.27% -0.24% -0.19% 0.08% -0.18% -0.05%   -0.28%
CHF 0.00% 0.02% 0.07% 0.33% 0.08% 0.21% 0.26%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Technical analysis: USD/CAD fails to break resistance at the 1.3640 area

The strong US employment data has sent the USD/CAD to test an important resistance area above 1.3620, which so far remains intact, as positive Canadian PMI data has eased bullish pressure on the pair.

The overall picture shows the US Dollar trading back and forth within an ascending channel with price action capped below trendline resistance at 1.3640. Above here, the next targets are 2.3710 and 1.3770. The channel’s measured target is 1.3845. Support levels are 1.3560 and 1.3485.

USD/CAD 4-Hour Chart

(Click on image to enlarge)


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Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not ...

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