USD/CAD sticks to intraday gains above mid-1.3300s, US jobs report (NFP) looms large
- USD/CAD scales higher for the second straight day and builds on the overnight recovery.
- Sliding US bond yields weighs on the USD and keeps a lid on any further gains for the pair.
- Investors now look forward to the closely-watched US monthly jobs data for some impetus.
The USD/CAD pair sticks to its strong intraday gains through the early North American session and is currently placed just above mid-1.3300s, still up over 0.30% for the day.
The overnight US Dollar rebound from a nine-month low run out of steam on the last day of the week amid a modest downtick in the US Treasury bond yields. This, in turn, is seen as a key factor acting as a tailwind for the USD/CAD pair. That said, a generally weaker tone around the equity markets limits the downside for the safe-haven buck and remains supportive of the bid tone surrounding the major.
Apart from this, expectations that robust employment could keep the US inflation higher and allow the Fed to stick to its hawkish stance for longer favours the USD bulls. In fact, an unexpected fall in the US Initial Jobless Claims on Thursday pointed to the underlying strength in the labor market. This might have raised hopes for a positive surprise from the closely-watched US monthly jobs data.
The popularly known NFP report is expected to show that the US economy added 185K jobs in January, down from 223K in the previous month. Moreover, the jobless rate is anticipated to edge higher to 3.6% from 3.5% in December. The data should drive the USD demand. This, along with oil price dynamics might influence the commodity-linked Loonie and provide some impetus to the USD/CAD pair.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
