Canadian Dollar lacks direction ahead of twin US, Canadian employment releases
USD/CAD trades around 1.4020 on Friday at the time of writing, up a modest 0.06% on the day with no clear directional bias as investors remain cautious ahead of the release of US and Canadian July employment reports.
On Friday, the USD/CAD exchange rate stood at 1.4020, with a slight increase of 0.06% as traders remained uncertain ahead of the release of US and Canadian July employment figures. The US Dollar gained support from safe-haven demand due to ongoing tensions in the Middle East, particularly the Strait of Hormuz. Iran's parliament reviewed a draft agreement aimed at restricting the passage of US and Israeli vessels, adding to concerns over global supply chains and inflation.
US Treasury yields remained elevated, reflecting the possibility that the Federal Reserve could maintain a restrictive policy stance if inflation persists. Several central bank officials signaled a cautious tone, suggesting interest rates may stay higher for an extended period.
Investors awaited the July Nonfarm Payrolls (NFP) report, with economists predicting a 80,000 job gain in the US since June, with the unemployment rate remaining at 4.2%. Annual wage growth, measured by Average Hourly Earnings, was expected to stay steady at 3.5%.
For Canada, higher oil prices provided fundamental support to the Canadian Dollar, benefiting from stronger export revenues when crude prices rise. However, the strength of the US Dollar has been too robust to offset this support, keeping USD/CAD near recent highs. Economists anticipate Canadian employment to rise by 15,000 jobs in July, following an 18.2,000 increase in June, with the unemployment rate staying steady at 6.5%.
TD Securities anticipates that the Canadian labor market will continue to strengthen in July, with employment forecast to increase by another 20,000 jobs, aligning with market expectations. They note that the services sector may face a mild headwind from a partial reversal of recent strength in accommodation and food services, but overall, payroll employment has been on a stronger trajectory in recent months.
With the Canadian Dollar being the strongest against the British Pound, the percentage change table showed a mixed performance of major currencies against each other. Gold continued its strong performance, reaching three-month highs beyond $4,600, capitalizing on persistent US Dollar weakness. The cryptocurrency market also showed momentum, with Bitcoin trading above $77,000, supported by renewed institutional demand.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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