- `USD/CAD drops sharply to 1.3630 after strong Canadian Employment data.
- Canadian job market expanded by 90.4K fresh payrolls while annual wage growth slowed to 4.8%.
- Fed Bostic said the central bank is uncertain about when and how much interest rates should be reduced.
The USD/CAD pair faces a sharp sell-off to 1.3630 in Friday’s early New York session as Statistics Canada has posted strong Canadian Employment data. The agency showed that the employers hired 90.4K job-seekers in April, significantly higher than the consensus of 18K. In March, the job market recorded a lay-off of 2.2K employees.
The Unemployment Rate remains steady at 6.1% while investors estimated the joblessness to rise to 6.2%. However, the annual Average Hourly Wages declined to 4.8% from 5.0% in March. Average Hourly Wages data is a leading indicator of wage growth. Slower wage growth reduces the consumer spending pace, which exhibits a soft inflation outlook.
The impact of overall Employment data is expected to be lower on Bank of Canada’s (BoC) interest rate outlook as strong job additions will offset slower wage growth.
Meanwhile, the appeal of the Canadian Dollar remains strong due to a sharp recovery in the Oil price. West Texas Intermediate (WTI), futures on NYMEX, continues its winning spell for the third trading session on Friday amid firm speculation that the Federal Reserve (Fed) will pivot to policy normalization from the September meeting. It is worth noting that Canada is the leading exporter of Oil to the United States and higher Oil prices support the Canadian Dollar.
On the US Dollar front, steadily cooling US labor market conditions have kept the US Dollar’s upside limited. The US Dollar Index, which tracks the Greenback’s value against six major currencies, rebounds slightly from the crucial support of 105.00. While investors remain optimistic that the Fed will start to reduce interest rates in September, policymakers are still uncertain about rate cuts. In the American session, Atlanta Federal Reserve President Raphael Bostic said the central bank is considering rate cuts this year but is uncertain about when and how much quantitative easing will occur.
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 extends sideways grind below 1.0900
EUR/USD stays in a consolidation phase below 1.0900 following the previous week's rally. In the absence of high-tier data releases, the US Dollar stays resilient against its rivals as investors scrutinize comments from central bank officials.
Gold retreated from record highs, maintains the upward bias
Gold rose sharply at the beginning of the week on escalating geopolitical tensions and touched a new all-time high of $2,450. With market mood improving modestly, XAU/USD erases a majority of its daily gains but manages to hold above $2,400.
GBP/USD holds steady near 1.2700, in an uneventful US session
GBP/USD fluctuates in a narrow channel near 1.2700 on the first trading day of the week. The cautious market stance helps the US Dollar hold its ground while central bank officials fail to trigger some action ahead of this week's key events.
Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.
Week ahead: Nvidia results and UK CPI falling back to target
What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower.