USD/CAD declines in the aftermath of upbeat Canadian Employment, revised US CPI data
|- USD/CAD falls to near 1.3430 as robust labor demand in Canada.
- US BLS revision shows that monthly CPI for January grew by 0.2% against the reading of 0.3%.
- Oil prices eye more upside as Israel rejects ceasefire proposal.
The USD/CAD pair has come under pressure as the Canadian Employment data for January has outperformed expectations in the early New York session of Friday. Statistics Canada has reported a strong labor growth of 37.5K against expectations of 15K and upwardly revised December’s reading of 12.3K.
The Unemployment Rate surprisingly fell to 5.7% while investors anticipated it rising to 5.9% from the former reading of 5.8%. An upbeat labor market data would strengthen the argument by the Bank of Canada (BOC) for holding interest rates at their current level.
On the oil front, oil price aims to extend its rally above $76.5 as Israeli Prime Minister Benjamin Netanyahu rejected the ceasefire proposal due to unacceptable truce terms proposed by Hamas. This is expected to deepen tensions in the Middle East, which could disrupt oil supply. Lower oil supply results in higher prices. It is worth noting that Canada is the leading oil exporter to the United States, and higher oil prices support the Canadian Dollar.
The US Dollar Index (DXY) comes under pressure as the US Bureau of Labor Statistics (BLS) has revised the monthly headline Consumer Price Index (CPI) to 0.2% from 0.3%. The inflation has been revised as the BLS has employed new seasonal adjustment factors. The new process accurately reflects how consumer prices behaved over the year.
Meanwhile, Federal Reserve (Fed) policymakers emphasize keeping key rates restricted until they get convinced that inflation will come down sustainably to the 2% target. Boston Federal Reserve Bank President Susan Collins said risks of inflation stalling have turned towards the upside due to strong economic growth.
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 in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.