USD/CAD refreshes four-month high near 1.3640 on solid US NFP, weak Canadian Employment

Source Fxstreet
Apr 5, 2024 14:17
  • USD/CAD rallies on strong US NFP, weak Canadian labor market data.
  • The speculation for Fed to begin rate cuts could be shifted to the second half of this year.
  • Canadian labors were fired over March. The jobless rate rose to 6.1%.

The USD/CAD pair prints a fresh four-month high at 1.3640 in Friday’s early American session. The Loonie asset rallies as the United States Bureau of Labor Statistics (BLS) has reported upbeat Nonfarm Payrolls and the Statistics Canada has showed poor Employment data for March.

The US NFP reported that the labor market witnessed 303K fresh payrolls, significantly better than expectations of 200K and the prior reading of 270K. The Unemployment Rate falls to 3.8% from the consensus and the prior reading of 3.9%. Strong labor demand has dented market expectations for the Federal Reserve (Fed) to begin reducing interest rates, which is currently expected from the June meeting.

Robust labor demand is generally followed by strong wage growth as employers are forced to offer higher pay due to shortage of workers. Higher wage growth boosts consumer spending, which keeps inflation stubbornly higher.

On Thursday, Minneapolis Fed Bank President Neel Kashkari said rate cuts won’t be required this year if inflation remains stall. Neel Kashkari forecasted two rate cuts by 2024 in the latest Fed’s dot plot.

Upbeat labor demand has boosted the US Dollar’s appeal. The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, extends its upside to 104.65.

Meanwhile, the Canadian Dollar weakens as workers were laid-off over month. Canada’s labor market witnessed drawdown of 2.2K workers, which investors forecasted fresh recruitment of 25K jobs. The Unemployment Rate rose strongly to 6.1% from expectations of 5.9% and the prior reading of 5.8%. However, annual Average Hourly Earnings grew at a higher pace of 5.0% from 4.9% in February.

Weak labor demand will boost expectations for the Bank of Canada (BoC) pivoting to rate cuts sooner.

USD/CAD

Overview
Today last price 1.3625
Today Daily Change 0.0083
Today Daily Change % 0.61
Today daily open 1.3542
 
Trends
Daily SMA20 1.3539
Daily SMA50 1.3513
Daily SMA100 1.3487
Daily SMA200 1.3503
 
Levels
Previous Daily High 1.3559
Previous Daily Low 1.3478
Previous Weekly High 1.3614
Previous Weekly Low 1.3525
Previous Monthly High 1.3614
Previous Monthly Low 1.342
Daily Fibonacci 38.2% 1.3528
Daily Fibonacci 61.8% 1.3509
Daily Pivot Point S1 1.3494
Daily Pivot Point S2 1.3445
Daily Pivot Point S3 1.3413
Daily Pivot Point R1 1.3575
Daily Pivot Point R2 1.3608
Daily Pivot Point R3 1.3656

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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