By Ketki Saxena
Investing.com -- The Canadian dollar weakened against its US counterpart today after a short-lived rally, tracking risk-off sentiment along with North American equities, which reversed into the red after two days of solid gains.
The U.S. dollar meanwhile was boosted by a sharp rise in US 10-year Treasury yields as traders reassessed their bets on how aggressively the Federal Reserve will raise rates after robust employment numbers.
At 1:20 p.m ET, the USD/CAD pair was trading at C$ 1.3632 to a US dollar, up 0.90% in the day's trading and with the day's range of 1.3504 - 1.3696.
The dollar gained broadly following U.S. ADP (NASDAQ:ADP) numbers, which showed an increase in private employer hiring in September, and as the employment component of the ISM's Services PMI increased. Following the data, the probability of a 75 basis points rate hike in November climbed above 70% as investors expect the Fed will stay hawkish.
Additionally Senior Federal Reserve officials, including San Francisco Fed Mary Daly and Philip Jefferson, a governor on the Fed’s board, played down suggestions of a dovish 'pivot'.
The Canadian dollar gained some support from news confirming the OPEC+ decision to lower the group's output by 2 million barrels per day, despite pressure from the United States and others to pump more oil. OPEC+ is seeking to support oil prices, which have fallen to around $90 from $120 three months ago. Crude gained a further boost from the EIA’s reporting a larger-than-expected decline in US crude oil stocks in the week ending September 30.
The investor will likely take direction next from the Bank of Canada Governor Tiff Macklem’s speech tomorrow, and Friday’s jobs reports from both the US and Canada.