USD/CAD moves away from one-week low, retakes 1.4300 ahead of US/Canadian jobs reports
USD/CAD attracts some buyers and snaps a three-day losing streak to over a one-week trough.
Bearish Oil prices undermine the Loonie and support the pair amid some repositioning trade.
Traders now look forward to employment details from the US and Canada for a fresh impetus.
The USD/CAD pair builds on the overnight bounce from the 1.4240-1.4235 region, or a one-and-half-week low, and gains some positive traction during the Asian session on Friday. This marks the first day of a positive move in the previous three and lifts spot prices back above the 1.4300 round figure in the last hour.
Bearish Crude Oil prices undermine the commodity-linked Loonie and act as a tailwind for the USD/CAD pair. Apart from this, the uptick could be attributed to some repositioning trade ahead of the crucial employment details from the US and Canada, due later during the North American session. Any meaningful appreciating move, however, still seems elusive amid sustained US Dollar (USD) selling bias.
Worries that US President Donald Trump's trade tariffs could slow the US economic growth in the long run and force the Federal Reserve (Fed) to cut interest rates several times this year dragged the buck to its lowest level since early November on Thursday. Moreover, investors remain uncertain about Trump's trade policies, especially after another U-turn on the recently imposed tariffs on Mexico and Canada.
Trump on Thursday exempted goods from both Canada and Mexico that comply with the US–Mexico–Canada Agreement for a month from the steep 25% tariffs that he had imposed earlier this week. This helps ease trade war fears, which, along with bets the Bank of Canada (BoC) will pause rate cuts at its upcoming meeting later this month, could support the Canadian Dollar (CAD) and cap the USD/CAD pair.
Traders might also opt to wait for the release of the closely-watched US Nonfarm Payrolls (NFP) report, which will play a key role in influencing the near-term USD price dynamics. Apart from this, Canadian jobs data should provide some meaningful impetus to the USD/CAD pair. Nevertheless, spot prices remain on track to register weekly losses, and the fundamental backdrop warrants caution for bullish traders.
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