USD/CAD retreats from 1.3700 as US Dollar falls sharply, US Inflation in focus


  • USD/CAD falls sharply from 1.3700 amid a soft US Dollar.
  • Investors await the US Inflation for fresh guidance on interest rates.
  • Strong Canadian job data deepens uncertainty over BoC rate-cut prospects.

The USD/CAD pair falls back sharply while attempting to recapture the round-level resistance of 1.3700 in Monday’s American session. The Loonie asset comes under pressure as the US Dollar falls sharply due to firm speculation that the Federal Reserve (Fed) will start reducing interest rates from the September meeting.  

This has also improved the risk appetite of investors. The S&P 500 opens on a positive note, exhibiting a cheerful market sentiment. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, remains feeble near the crucial support of 105.00. 10-year US Treasury yields fall sharply to 4.47%. The deepening confidence of investors for the Fed to return to policy normalisation is an unfavourable scenario for the US Dollar and bond yields.

The US Dollar is under pressure as weak United States Nonfarm Payrolls (NFP) for April and larger-than-expected Initial Jobless Claims for the week ending May 3 have shaken investors’ confidence in labor market strength.

Meanwhile, investors shift focus to the US Inflation data for April, which will be published on Wednesday. Hotter-than-expected inflation data would neutralize the impact of fewer hiring and slower wage growth in April and will force traders to unwind their bets in favor of rate cuts in September. On the contrary, soft inflation data will further boosts Fed rate-cut prospects.

On the Canadian Dollar front, strong Employment data for April has blown expectations for the Bank of Canada (BoC), pivoting to policy normalisation from the June meeting. Statistics Canada reported that Canadian 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%.

USD/CAD

Overview
Today last price 1.3673
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.3673
 
Trends
Daily SMA20 1.3715
Daily SMA50 1.3622
Daily SMA100 1.3529
Daily SMA200 1.3563
 
Levels
Previous Daily High 1.3691
Previous Daily Low 1.3618
Previous Weekly High 1.3763
Previous Weekly Low 1.3618
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.3646
Daily Fibonacci 61.8% 1.3663
Daily Pivot Point S1 1.363
Daily Pivot Point S2 1.3588
Daily Pivot Point S3 1.3558
Daily Pivot Point R1 1.3703
Daily Pivot Point R2 1.3733
Daily Pivot Point R3 1.3776

 

 

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