USD/CAD retreats below 1.3100, turns red for the week
- USD/CAD reversed its direction after climbing to daily high above 1.3140.
- US Dollar Index fails to hold above 93.00 following NFP-led rally.
- Unemployment Rate in US declined to 8.2% in August.
The USD/CAD pair declined below 1.3100 in the early trading hours of the American session but shot higher after the US jobs report provided a boost to the greenback. After advancing to a daily high of 1.3141, however, the pair reversed its direction and was last seen losing 0.4% on a daily basis at 1.3075. For the week, USD/CAD remains on track to close with small losses.
DXY looks to end week below 93.00
The US Bureau of Labor Statistics reported on Friday that Nonfarm Payrolls in the US increased by 1.37 million in August and the Unemployment Rate fell sharply to 8.4% from 10.2% in July. The initial reaction to these data helped the greenback gather strength against its rivals and lifted the US Dollar Index (DXY) to a daily high of 93.24. The 10-year US Treasury bond yield also surged higher on the jobs report and was last down 9.2% on the day.
Nevertheless, end-of-week flows and profit-taking made it difficult for the DXY to preserve its bullish momentum and the index was last seen virtually unchanged on the day at 92.80. With the greenback losing its traction, the pair pulled away from its daily highs and returned below 1.3100 in the last hour.
On the other hand, the data from Canada revealed that the Unemployment Rate edged lower to 10.2% in August with the Net Change in Employment arriving at 245,800. Additionally, at 67.8 in August, the Ivey PMI showed that the economic activity in the private sector continued to expand at a robust pace.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
