• USD/CAD rises 0.35% to 1.3675 after US jobless claims fall below estimates, pressuring the Fed to focus on its 2% inflation target.
  • Market anticipates a 43.5% chance of a 25 bps Fed rate hike in November, as per CME FedWatch Tool, bolstering the US Dollar.
  • Loonie stumbles as crude oil prices dip and Canadian GDP contracts, diminishing prospects of a Bank of Canada rate hike.

The US Dollar (USD) extends its advance against the Loonie (CAD) as data from both countries, although it remains positive, favors the Greenback. Powell’s saying “higher for longer” in his speeches continues to impact the markets, which remain wary of further tightening, boosting the USD. The USD/CAD is trading at 1.3675 and gains 0.35% after hitting a daily low of 1.3631.

USD/CAD gains momentum amid favorable jobless claims and Fed rate hike speculation despite stable Canadian business activity.

The US Department of Labor showed that Initial Jobless Claims for the week ending September 2 rose by 216K, below estimates of 229K, indicating the jobs market is yet to loosen. This puts pressure on the US Federal Reserve (Fed), which focuses on bringing inflation towards its 2% goal.

Although Fed policymakers have begun to adopt a more cautious stance, the market’s reaction suggests the Fed could increase rates in the future. The CME FedWatch Tool depicts money markets have fully priced in the US central bank would keep rates unchanged in September. But for November, chances of a 25 bps increase lie at 43.5%.

The USD/CAD pair reacted to the upside on the data, even though US Treasury bond yields are unchanged. In the meantime, the US Dollar Index (DXY), a gauge of the buck’s value against a basket of peers, prints modest gains of 0.18

Another reason behind Loonie’s fall is crude oil prices are under pressure, down 0.31%, at $87.27, as the market awaits EIA inventories.

Recently, data from Canada showed that business activity expanded in August following a contraction of 48.6 in July. The Ivey PMI came at 53.5, indicating expansion, as shown by data on Thursday. Some subcomponents of the PMI showed an improvement, like employment and supplier deliveries. Although it paints an improved scenario, the latest Gross Domestic Product (GDP) report for the second quarter contracted -0.2%, denting the Bank of Canada (BoC) of a possible rate hike yesterday as the economy cools down.

What to watch?

The Canadian economic docket would feature employment data, while the US will release Wholesale Inventories and Fed speakers.

USD/CAD Price Analysis: Technical outlook

The pair resumed its uptrend, challenging a major resistance area at 1.3667, April’s 28 daily high. A daily close above the latter would expose the 1.3700 figure and then the March 24 high at 1.3804. Conversely, sellers could remain hopeful of lower prices if USD/CAD ends Thursday’s session below 1.3667. A breach of the latter would expose September’s 6 low of 1.3622 before diving towards September 4 low of 1.3586.

USD/CAD

Overview
Today last price 1.3675
Today Daily Change 0.0039
Today Daily Change % 0.29
Today daily open 1.3636
 
Trends
Daily SMA20 1.3547
Daily SMA50 1.3371
Daily SMA100 1.3402
Daily SMA200 1.3465
 
Levels
Previous Daily High 1.3677
Previous Daily Low 1.3623
Previous Weekly High 1.3637
Previous Weekly Low 1.3489
Previous Monthly High 1.364
Previous Monthly Low 1.3184
Daily Fibonacci 38.2% 1.3643
Daily Fibonacci 61.8% 1.3656
Daily Pivot Point S1 1.3613
Daily Pivot Point S2 1.3591
Daily Pivot Point S3 1.3559
Daily Pivot Point R1 1.3668
Daily Pivot Point R2 1.37
Daily Pivot Point R3 1.3722

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD keeps range below 1.0750 ahead of US data, Fedspeak

EUR/USD keeps range below 1.0750 ahead of US data, Fedspeak

EUR/USD is consolidating its mild recovery below 1.0750 in the European session on Tuesday. Risk flows remain and exert additional downside pressure on the US Dollar while Euro traders reposition ahead of Sunday's French election. Mid-tier US data and Fedspeak are on tap.

EUR/USD News

GBP/USD recovers to 1.2700 as US Dollar weakness extends

GBP/USD recovers to 1.2700 as US Dollar weakness extends

GBP/USD is recovering to test 1.2700 in the European morning on Tuesday. Extended US Dollar weakness due to improved market mood, aids the pair's latest uptick. Traders look to the US sentiment data and Fed speeches for further impetus, as the UK calendar remains data-quiet. 

GBP/USD News

Gold moves within familiar territory as traders await further cues

Gold moves within familiar territory as traders await further cues

Gold (XAU/USD) trades in familiar territory in the $2,320s on Tuesday, amid a subdued market mood after a mixed session for Asian stocks and investor loss of appetite for tech stocks on Monday. 

Gold News

Bitcoin breaks below descending wedge, finding support on key level

Bitcoin breaks below descending wedge, finding support on key level

Bitcoin spot ETFs record a $174.5 million outflow on Monday, marking seven consecutive days of continuous decline. Mt.Gox announces Bitcoin and Bitcoin Cash repayment to creditors in July.

Read more

Canada CPI Preview: Inflation expected to continue easing in May

Canada CPI Preview: Inflation expected to continue easing in May

The Canadian CPI is expected to rise at an annual rate of 2.6% in May, a tad slower than a 2.7% increase in April. On a monthly basis, the CPI inflation is seen easing to 0.3% in the same period after April’s 0.5% growth. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures