Canadian Dollar stumbles against NFP-bolstered Greenback on Friday

June 7, 2024 6:52 pm

  • Canadian Dollar tumbles -0.6% against US Dollar on Friday.
  • Canada added more jobs than expected but is eclipsed by US NFP.
  • Bumper job additions and rising wages crimp rate cut hopes.

The Canadian Dollar (CAD) is giving a mixed performance on Friday, climbing against the majority of its major currency peers but backsliding against the US Dollar (USD). The CAD shed six-tenths of a percent against the Greenback after a bumper US Nonfarm Payrolls (NFP) sent the USD broadly higher as investor hopes for a September rate cut from the Federal Reserve (Fed) wither on the vine.

Canada added more jobs than expected in May, but the figure was still well below previous figures, limiting the CAD’s upside momentum. Hourly wages also gained ground in both Canada and the US, while the US Unemployment Rate ticked higher in a cautionary note to Friday’s otherwise clean beat of market forecasts.

Daily digest market movers: Fresh job additions crimp rate cut bets

  • US NFP added 272K net new jobs in May, clobbering the 185K forecast though the previous month’s print was revised lower to 165K from 175K.
  • The US Unemployment Rate ticked higher to 4.0% in May, a 28-month high.
  • US Average Hourly Earnings rose 0.4% MoM in May, above the forecast 0.3% and doubling the previous 0.2%.
  • Canada’s Net Change in Employment rose to 26.7K in May, above the 22.5K forecast but still well below the previous month’s 90.4K.
  • According to the CME’s FedWatch Tool, investor hopes for a September rate cut from the Fed were knocked firmly back by US data on Friday. Rate traders are pricing in only a 55% chance of at least a quarter-point cut from the Fed on September 8, down from over 70% before the US NFP print.

Canadian Dollar PRICE Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the US Dollar.

USD   0.76% 0.50% 0.66% 0.59% 1.18% 1.39% 0.79%
EUR -0.76%   -0.24% -0.14% -0.17% 0.42% 0.69% 0.01%
GBP -0.50% 0.24%   0.12% 0.07% 0.67% 0.93% 0.25%
JPY -0.66% 0.14% -0.12%   -0.05% 0.53% 0.76% 0.14%
CAD -0.59% 0.17% -0.07% 0.05%   0.59% 0.87% 0.18%
AUD -1.18% -0.42% -0.67% -0.53% -0.59%   0.26% -0.42%
NZD -1.39% -0.69% -0.93% -0.76% -0.87% -0.26%   -0.66%
CHF -0.79% -0.01% -0.25% -0.14% -0.18% 0.42% 0.66%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

Technical analysis: Canadian Dollar grinds out some gains as US Dollar soars

The Canadian Dollar (CAD) tumbled six-tenths of one percent against the Greenback on Friday, but otherwise stuck to its guns. The CAD rose three-quarters of one percent against the New Zealand Dollar (NZD) and six-tenths of one percent against the Australian Dollar (AUD). The CAD is also in the green within a fifth of a percent against the Euro (EUR) and the Swiss Franc (CHF).

USD/CAD shot to fresh near-term highs above 1.3750 on Friday, bumping into the ceiling of recent consolidation patterns. The pair is set to continue grinding sideways in the medium-term as buying power in the US Dollar evaporates at familiar technical highs.

Daily candlesticks show the pair on pace to see its strongest close in over a month, and bumping into its highest bids since early May. Consolidation remains the name of the game in the long-term, though USD/CAD continues to grind out chart paper north of the 200-day Exponential Moving Average (EMA).

USD/CAD hourly chart

USD/CAD daily chart

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months’ reviews ​and the Unemployment Rate are as relevant as the headline figure. The market’s reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

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