USD/CAD pulls back to levels near 1.4100 with Canadian jobs on tap

The US stalls below 1.4140 against the Canadian Dollar, following a six-day rally.
Canada's employment is expected to show a 2,500 net loss in October.
In the US, Fed's Jefferson and the Michigan Consumer Sentiment Index will grab the focus.

Guillermo Alcala FXStreet

The US Dollar has lost some momentum on Friday’s European trading session, and the USD/CAD pulled back to the 1.1410 area from session highs at 1.4125. The pair's rally from last week's low below 1.3900 was capped at 1.4140 earlier in the week, and is looking for direction ahead of Canada’s employment data.

The Greenback drew support on Thursday from the risk-averse sentiment as the main Wall Street indices tanked, with tech stocks leading losses, amid revived fears of an AI bubble. The negative market sentiment has extended into Asia and Europe, although market volatility remains muted so far.

US employment data disappoints

US private data released on Thursday revealed that the economy destroyed employment in October due to cost-cutting plans from businesses and the adoption of AI technologies. These figures offset the moderate optimism after the better-than-expected US ADP Employment report seen on Wednesday.

In Canada, the focus today is on October’s Employment report, which is expected to show a 2,500 net loss in employment, following a 60,400 increase in September. The Unemployment Rate is expected to remain steady at 7.1%, but these figures might add pressure on the BoC to lower interest rates further.

In the US, the comments of the Federal Reserve vice chair Philip Jefferson might provide some clues about the central bank’s monetary policy plans for December’s meeting, although the highlight of the day is the Michigan Consumer Sentiment Index, which is expected to have deteriorated for the fourth consecutive month.

Economic Indicator

Net Change in Employment

The Net Change in Employment released by Statistics Canada is a measure of the change in the number of people in employment in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending and indicates economic growth. Therefore, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.

Why it matters to traders?

Canada’s labor market statistics tend to have a significant impact on the Canadian dollar, with the Employment Change figure carrying most of the weight. There is a significant correlation between the amount of people working and consumption, which impacts inflation and the Bank of Canada’s rate decisions, in turn moving the C$. Actual figures beating consensus tend to be CAD bullish, with currency markets usually reacting steadily and consistently in response to the publication.

Economic Indicator

Unemployment Rate

The Unemployment Rate, released by Statistics Canada, is the number of unemployed workers divided by the total civilian labor force as a percentage. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labor market and a weakening of the Canadian economy. Generally, a decrease of the figure is seen as bullish for the Canadian Dollar (CAD), while an increase is seen as bearish.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.