Canadian Dollar remains under pressure as USD/CAD flirts with 1.4000

USD/CAD trades around 1.3980 on Thursday, remaining close to the psychological 1.4000 level.
US Initial Jobless Claims fall to 196K, below market expectations of 208K.
Weak Oil prices continue to weigh on the Canadian Dollar.

Ghiles Guezout FXStreet

USD/CAD trades around 1.3980 on Thursday at the time of writing, little changed on the day and hovering near the psychological 1.4000 level. The US Dollar (USD) remains supported by better-than-expected employment data, while the Canadian Dollar (CAD) continues to face pressure from weak Oil prices.

The US Department of Labor (DOL) reported on Thursday that Initial Jobless Claims fell to 196K in the week ending September 12, below market expectations of 208K and down from 206K in the previous week.

The four-week moving average of Initial Jobless Claims also declined by 2.75K to 203.25K. Meanwhile, Continuing Jobless Claims fell by 39K to 1.73M.

The figures suggest that the US labor market remains relatively resilient and could reinforce expectations that the Federal Reserve (Fed) will maintain a restrictive monetary policy stance. The US central bank raised its benchmark interest rate by 25 basis points (bps) on Wednesday to a range of 3.75%-4%.

Fed Chair Kevin Warsh also stressed that price pressures remain too high, reinforcing expectations of further interest rate increases. According to the CME FedWatch tool, markets now see an 86% chance of at least one additional rate hike by the end of the year, up from 79% before the monetary policy decision.

The prospect of tighter US monetary policy contrasts with that of the Bank of Canada (BoC), which is expected to keep interest rates unchanged amid economic uncertainty stemming from trade tensions with the United States (US). This monetary policy divergence continues to provide fundamental support to USD/CAD.

Meanwhile, the Canadian Dollar remains under pressure as the recent Oil price rally loses momentum. Oil prices struggle to extend their advance following reports that Saudi Arabia expects to restore part of the capacity of its East-West pipeline within days after recent drone strikes on the infrastructure.

As Canada is a major energy exporter, weaker Oil prices tend to weigh on the Canadian Dollar. The combination of a resilient US labor market, expectations of a more hawkish Fed and weakness in the Loonie therefore keeps USD/CAD within striking distance of the 1.4000 level.

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 British Pound.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.26%	0.03%	-0.44%	-0.06%	-0.41%	-0.55%	-0.42%
EUR	0.26%		0.29%	-0.14%	0.21%	-0.16%	-0.26%	-0.14%
GBP	-0.03%	-0.29%		-0.44%	-0.08%	-0.46%	-0.55%	-0.41%
JPY	0.44%	0.14%	0.44%		0.31%	0.00%	-0.15%	-0.01%
CAD	0.06%	-0.21%	0.08%	-0.31%		-0.34%	-0.46%	-0.31%
AUD	0.41%	0.16%	0.46%	-0.01%	0.34%		-0.10%	0.00%
NZD	0.55%	0.26%	0.55%	0.15%	0.46%	0.10%		0.17%
CHF	0.42%	0.14%	0.41%	0.00%	0.31%	-0.00%	-0.17%

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

FXStreet

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.

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