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US dollar firms versus Canadian dollar near 1.4050 ahead of JOLTS
Traders are also watching US July employment data on Friday for clues on the Fed’s next move, with September rate hike odds recently near 64.7% per CME FedWatch.
The USD/CAD pair rose toward 1.4050 in early European trade on Tuesday as traders weighed developments around US-Iran talks, with the market awaiting US JOLTS job openings data later in the day, FXStreet reported.
The outlook for the Canadian dollar is tied to the broader macro picture and oil risk, since Canada is a major oil exporter. FXStreet noted that renewed US-Iran tensions could lift crude prices, which typically supports the CAD against the US dollar.
Separate from the geopolitics, the report highlighted that stronger-than-expected US July employment data on Friday could reinforce expectations for higher-for-longer US rates and bolster the greenback. Markets have priced in nearly a 64.7% chance of a September rate hike, down from about 77% before the July Fed meeting, according to CME FedWatch.
Analysts cited by FXStreet said the CAD has drawn support from a generally softer USD undertone over the past couple of sessions, but that USD/CAD has struggled to break through the 1.40 area. The article also pointed to technical indicators, with USD/CAD holding above its 100-day simple moving average and RSI(14) easing toward neutral at 45.9.
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