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USD/CAD holds near 1.4020 as US and Canada jobs loom
The pair was up about 0.1% on the day as traders positioned for the US July Nonfarm Payrolls and Canada’s July employment report, which could shift expectations for the Fed’s policy path.
FXStreet reports USD/CAD traded around 1.4020 on Friday, up roughly 0.06% on the day, with no clear directional bias as investors stayed cautious ahead of back to back US and Canadian July employment releases.
The US dollar received support from safe haven demand tied to ongoing Middle East tensions, including uncertainty around reopening of the Strait of Hormuz and worries about global supply chains and the inflation outlook. FXStreet also pointed to elevated US Treasury yields as markets reassessed whether the Federal Reserve could keep policy restrictive if inflation persists.
Attention is now focused on the July Nonfarm Payrolls report, where economists expect 80K jobs added after 57K in June, an unchanged unemployment rate at 4.2%, and steady annual wage growth at 3.5% in Average Hourly Earnings. The data could reshape interest rate expectations and increase US dollar volatility.
On the Canadian side, FXStreet said higher oil prices offer fundamental support for the Canadian dollar but have not been enough to offset the current strength in the US dollar, leaving USD/CAD near recent highs. Canada’s July employment report is also due at the same time as US NFP, with forecasts calling for 15K jobs after 18.2K in June and an unemployment rate holding at 6.5%.