- USD/CAD attracted some buying and refreshed daily high during the early North American session.
- Expectations for a further tightening by the Fed acted as a tailwind for the USD and extended support.
- The mixed US/Canadian employment data did little to provide any meaningful impetus to the major.
- An uptick in crude oil prices underpinned the loonie and held back USD/CAD bulls from placing aggressive bets.
The USD/CAD pair quickly reversed an early North American session dip and jumped to a fresh daily high, around the 1.2875 region post-US/Canadian monthly jobs report.
The headline NFP print showed that the US economy added 428K new jobs in April as compared to the 391K anticipated. This, however, was offset by a slight disappointment from the unemployment rate, which held steady at 3.6% against a downtick to 3.5% anticipated. Moreover, Average Hourly Earnings also missed market expectations and rose 0.3% MoM in April.
The mixed US employment data did little to provide any impetus, though expectations that the Fed would need to take more drastic action to bring inflation under control acted as a tailwind for the buck. In fact, the markets are still pricing in a further 200 bps rate hike for the rest of 2022, which was evident from a fresh leg up in the US Treasury bond yields.
Apart from this, a generally weaker tone around the equity markets further drove haven flows towards the greenback. This, along with a rather unimpressive Canadian employment data, acted as a tailwind for the USD/CAD pair. Statistics Canada reported that the number of employed people rose by 15.3K in April, as against 55K anticipated, and the jobless rate edged down to 5.2%.
This, however, was offset by modest uptick in crude oil prices, which extended some support to the commodity-linked loonie and kept a lid on any further gains for the USD/CAD pair. Hence, it will be prudent to wait for some follow-through buying before traders start positioning for an extension of the recent appreciating move witnessed over the past two weeks or so.
Technical levels to watch
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 retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.