Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

USD/CAD Ends Day Sharply Higher; Jobs Data Pressure Loonie, Lift Greenback

Forex Aug 05, 2022 18:47
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Ketki Saxena 

Investing.com --  The Canadian Dollar weakened against its U.S. counterpart today, supported by as a stronger han expected U.S. job report raised bets for rate hike bets from the Federal Reserve helping the greenback rally sharply against a basket of currencies. 

The loonie meanwhile was pressured by dismal Canadian jobs data that pared back expectations for the Bank of Canada’s path of policy tightening as the Canadian economy shows another indicator of a slowdown. 

MUFG Bank also noted the USD/CAD pair as a pick of the coming week, in a note “Recommending a long USD/CAD trade idea to reflect our view that the USD will extend its rebound in the coming weeks”. 

The USD/CAD Pair closed the North American Session today at C$ 1.2938 to a greenback, up 0.57% in the day’s trading, and with the day’s range of 1.2861 - 1.2984.

The U.S. dollar index sharply extended gains following today’s non-farm payrolls, which showed an increase of 528K jobs in July, well above even the most optimistic estimates and over double market expectations for a rise of 250K. The previous month's reading was also revised higher to 398K from 372K, while the unemployment rate also edged down to 3.5% from 3.6% in June.

The (much) stronger data revives bets for a large Fed rate hike at its September meeting, sharply boosting U.S. treasury yields and the U.S. dollar.

Canadian jobs meanwhile widely missed economic expectations, losing 30.6. K jobs in July against estimates for an addition ofl 20K jobs, as Canadian jobs contracted for the second month in a row in another indicator of the cooling economy as the Bank of Canada has successively and increasingly more aggressively hiked its benchmark interest rate.

The jobs contraction is a particularly significant indicator on the Canadian economy, and accordingly has investors paring back bets on the Bank of Canada’s path to policy tightening: it is the robust labour market in the United States that many economists believe has prevented its economy from slipping into a downturn despite two quarters of reduced growth. 

MUFG notes that “Unlike the US labor market, there have been clearer signs of a slowdown in hiring in Canada. Employment has contracted for two consecutive months in June and July which supports our view that the Fed will tighten policy further than the BOC."

USD/CAD Ends Day Sharply Higher; Jobs Data Pressure Loonie, Lift Greenback
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email