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USD/CAD edges lower as Canadian dollar firms on oil strength
The pair was last around 1.3813, after Canada’s jobs report showed 41.7K jobs lost and unemployment held at 6.4%.
The Canadian dollar strengthened versus the US greenback on Monday, lifting the loonie as USD/CAD dipped about 0.15% to around 1.3813, according to FXStreet.
FXStreet cited Canada labor data from last week, where the economy shed 41.7K workers and the unemployment rate stayed at 6.4%, changes that had previously supported USD/CAD after US Nonfarm Payrolls outpaced estimates. Despite that earlier US-led boost, the move faded as traders shifted toward upcoming inflation releases.
The FXStreet note pointed to energy as a key driver, saying the escalation of the US-Iran conflict has pushed oil prices higher, a factor that typically supports the Canadian dollar and keeps potential downside pressure on USD/CAD.
Looking ahead, FXStreet said markets expect the Federal Reserve to deliver a 25 basis point hike, with odds around 63% for a move to 3.75% to 4.0%, while Bank of Canada money markets priced in about a 70% chance of holding the policy rate near 2.25%. The outlook also hinges on US producer and consumer inflation data later in the week, alongside jobs data and consumer sentiment, while Canada’s calendar is expected to be lighter.