|

Canadian Dollar consolidates amid Oil price rebound, US labor data in focus

  • USD/CAD consolidates around 1.4210 at the start of a week dominated by US labor market data.
  • US-Iran talks and rebounding Oil prices help limit downside pressure on the Canadian Dollar.
  • Scotiabank says the US Dollar rally looks extremely stretched, leaving room for a modest pullback.

USD/CAD trades around 1.4210 on Monday at the time of writing, as investors remain on the sidelines ahead of a series of key US labor market releases, culminating with Thursday's June Nonfarm Payrolls (NFP) report. The US Dollar (USD) is edging lower, while the Canadian Dollar (CAD) is not finding support from rebounding Oil prices.

Market participants are now focused on the May JOLTS Job Openings report, the ISM Manufacturing Purchasing Managers Index (PMI) and the June ADP Employment Change data, all of which will precede the official employment report. These releases could shape expectations for the Federal Reserve's (Fed) monetary policy after Chairman Kevin Warsh recently said the central bank should refrain from providing forward guidance under the current policy environment.

On the geopolitical front, investors are watching Tuesday's talks between the United States (US) and Iran regarding the situation around the Strait of Hormuz. The improved diplomatic outlook has reduced safe-haven demand for the US Dollar, although markets remain highly sensitive to any renewed escalation in the Middle East.

The Canadian Dollar is also not benefiting from the recovery in Oil prices. West Texas Intermediate (WTI) trades around $70.60 at the time of press, up 0.68% on the day, after rebounding from an earlier decline triggered by reports that Washington and Tehran would resume negotiations. Higher Crude prices typically support the Canadian currency, given Canada's status as a major Oil exporter, but the Loonie remains weighed down by earlier Crude losses.

According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Canadian Dollar may also benefit from narrower short-term US-Canada yield spreads. The bank estimates USD/CAD's fundamental fair value at 1.4135 and notes that positioning indicators point to an extremely overbought US Dollar. Scotiabank argues that this could cap further gains toward the 1.4250-1.4300 area and open the door to a modest pullback toward 1.4075-1.4080.

Canadian Dollar Price Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.37%-0.45%0.10%0.09%0.12%-0.20%-0.25%
EUR0.37%-0.08%0.48%0.45%0.51%0.19%0.12%
GBP0.45%0.08%0.56%0.54%0.57%0.24%0.19%
JPY-0.10%-0.48%-0.56%-0.01%0.00%-0.33%-0.36%
CAD-0.09%-0.45%-0.54%0.01%0.02%-0.31%-0.37%
AUD-0.12%-0.51%-0.57%-0.00%-0.02%-0.32%-0.36%
NZD0.20%-0.19%-0.24%0.33%0.31%0.32%-0.04%
CHF0.25%-0.12%-0.19%0.36%0.37%0.36%0.04%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

More from Ghiles Guezout
Share:

Editor's Picks

GBP/USD bounces off four-day lows, still below 1.3500

GBP/USD sticks to the bearish tone on Thursday, coming down to the 1.3480 region in the latter part of the NA session. In the meantime, Cable’s weakness comes as investors continue to assess mixed UK data, poor US results, and the persistent uncertainty surrounding the US-Iran conflict.

EUR/USD looks apathetic around 1.1530

EUR/USD reverses Wednesday’s downtick and trades with modest gains in the 1.1530 region following the end of the NA session on Thursday. The pair’s tepid advance comes on the back of the absence of clear direction in the US Dollar despite tensions from the Middle East appear far from alleviated. Later on Friday, investors are expected to monitor the the releases of another revision of GDP figures in the Euroland, US Retail Sales and the preliminary U-Mich gauge.

Gold loses the grip, recedes toward $4,350

Gold extends its intraday pullback on Thursday, retesting the $4,350 zone per troy ounce, or three-day troughs. Meanwhile, the yellow metal continues to monitor developments from the Middle East as well as bets surrounding the potential Fed’s rate path.

Ethereum Price Forecast: Fidelity plans to add staking to ETH ETF amid yield debate
Asset manager Fidelity has filed with the US Securities and Exchange Commission (SEC) to permit staking in its Ethereum (ETH) exchange-traded fund (ETF), the Fidelity Ethereum Fund (FETH), which holds over $898 million in net assets.
Week ahead – Summer lull could be tested by geopolitics and central bank expectations

US dollar stabilizes as September Fed hike bets remain subdued. Market volatility stays low, but thin liquidity could amplify movements. Key UK data could challenge pound strength; euro craves bullish catalysts.

Why is Crude Oil priced for a reopening the ships haven't made?
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.