- USD/CAD extends the previous day’s rebound from weekly low ahead of the key US/Canada jobs report for July.
- US dollar tracks yields to consolidate recent losses, snaps two-day downtrend.
- Oil prices bounce off six-month low amid geopolitical concerns.
USD/CAD picks up bids to 1.2875 as buyers keep reins for the second consecutive day heading into Friday’s European session.
The Loonie pair’s latest gains could be linked to the US dollar’s rebound, as well as the market’s cautious optimism, ahead of the key US/Canada jobs report for July. In doing so, the quote also ignores the corrective pullback in prices of Canada’s main export item WTI crude oil from a six-month low.
That said, the US Dollar Index (DXY) snaps a two-day downtrend while printing mild gains around 106.00. The greenback gauge dropped during the last two days before tracing the yields to consolidate recent losses. It’s worth noting that the US 10-year Treasury yields stabilize around 2.069% after declining in the last two days. Even so, the US Treasury yields continued to portray the risk of recession as the difference between the 10-year and 2-year bond coupons remain the widest since 2000.
On the other hand, WTI crude oil prices rise 1.15% intraday while bouncing off the lowest levels since February, to $89.00 at the latest.
The recent gains of the US dollar, as well as the crude oil prices, could also be linked to the fears of fresh geopolitical challenges emanating from the Taiwan Strait as China reflects its dislike for US House Speaker Nancy Pelosi’s visit to Taipei. At the latest, US Secretary of State Antony Blinken recently told an East Asia meeting, per West Official, that China’s reaction to US House Speaker Nancy Pelosi’s Taiwan visit had been "flagrantly provocative".
Amid these plays, Wall Street closed mixed and the S&P 500 Futures print mild gains while taking rounds to the two-month high flashed the previous day, up 0.23% intraday around 4,162 by the press time.
Moving on, USD/CAD traders should be cautious as the US employment report is likely to flash comparatively weaker data, which in turn could defy the Fed hawks and weigh on the pair prices. However, a surprise increase in the headline Nonfarm Payrolls (NFP), expected 250K versus 372K prior, won’t hesitate to propel the greenback.
Also read: Nonfarm Payrolls Preview: High expectations set deal the dollar a blow, create buying opportunity
Technical analysis
Unless crossing the 21-DMA hurdle surrounding 1.2910, the USD/CAD buyers remain unconvinced.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds gains near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.