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The Canadian Dollar (CAD) caught further lift on Thursday, rising against the US Dollar (USD) after US Nonfarm Payrolls (NFP) job gains wiped out market fears of a weakening US labor sector. ADP job gains teased a possible contraction in headline job creation in June, but a sweltering uptick in government hiring across the US at the state and local levels obliterated an overall slower pace of job gains elsewhere.

The Canadian side of the economic calendar remains a limited affair, at least until the next batch of key Canadian inflation figures due mid-month. The Bank of Canada’s (BoC) latest rate call is also slated for far off at the end of the month. Loonie traders continue to twist around will-they-won’t-they bets of another rate cut from the BoC, and odds are expected to whipsaw as the calendar grinds down to July 30.

Daily digest market movers: Canadian Dollar gains ground on upbeat NFP print.

• US NFP net job gains surged in June, rising to 147K on a seasonally-adjusted basis, bolstered by a strong uptick in education hiring at the state and local government levels.
• Despite the strong surge in hiring, analysts are warning it could be a one-off; governments are unlikely to maintain a strong pace of hiring.
• Meanwhile, tariff knock-on effects are still gripping the ‘real’ US economy: manufacturing, wholesale, and resource extraction jobs all posted declines.
• The upbeat headline jobs print helped the market to shrug off this week’s labor sector fears after the ADP jobs preview failed to measure government hiring, and overstated potential declines in net labor.
• Canada’s own iteration of headline net job growth is slated to release next week on Friday, with the Federal Reserve’s (Fed) latest Meeting Minutes due next Wednesday.

Canadian Dollar price forecast

The Canadian Dollar is continuing its march higher against the US Dollar, driving the USD/CAD pair even closer to multi-month lows below 1.3540. The Loonie’s day-on-day gains against the Greenback have been halting, but the US Dollar’s ongoing weakness on the back of rising general market sentiment is still sending USD/CAD steadily lower.

USD/CAD has been on a steady decline ever since posting multi-decade highs in early February. Daily candlesticks are getting pushed lower by descending trendlines, and the pair continues to churn further into bear country below the 50-day Exponential Moving Average (EMA) near 1.3775.

USD/CAD daily chart

(Click on image to enlarge)

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