USD/CAD sees upside above 1.2950 on jobs data divergence, US Inflation eyed
|- USD/CAD is expected to add more gains if crosses 1.2950 decisively on US/Canada job data divergence.
- The US NFP has remained upbeat while the Canadian job data have displayed a subdued performance.
- Lower July oil prices are likely to trim the US CPI numbers.
The USD/CAD pair is gearing up for a decent upside move and surpass of the critical hurdle of 1.2950 will be crucial for the greenback bulls. The asset has shifted into an inventory distribution process after an upside break of the prolonged consolidation in a 1.2767-1.2911 range. The pair is going to add decent gains ahead after a divergence in US/Canada labor market data.
The US Nonfarm Payrolls (NFP) landed at 528k, significantly higher than the expectations of 250k and the prior release of 372k. Investors were expecting that commentary from US corporate players citing a halt in the recruitment process will result in lower employment generation and will put more pressure on the Federal Reserve (Fed) for not hiking rates dramatically. The Unemployment Rate has trimmed to 3.5% against expectations and the former print of 3.6%.
On the loonie front, the economy has disclosed a continuation of job loss. The economic data landed a -30.6k vs. 43.2k. Also, the jobless rate has remained unchanged at 4.9%. A vulnerable labor data has weakened the Canadian dollar against the greenback.
Going forward, the US Consumer Price Index (CPI) data will be of utmost importance. The annual inflation figure is likely to remain lower at 8.7% against the prior release of 9.1%. Oil prices have remained in a negative trajectory in July, which might be the critical factor for a decent slippage in the price rise index. While the US CPI that doesn’t include volatile food and oil prices may improve to 6.1% from the prior print of 5.9%.
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.