- The Canadian dollar was strengthened on Friday, but the flows to the US dollar increased more, boosting a rebound in the USD/CAD.
- The net employment gains in non -agricultural payroll (NFP) of the US were stronger than expected, eclipsessing Canadian employment numbers.
- The key inflation figures of the US IPC Post-Aranceles are outlined for next week; Canada’s economic data calendar runs out of gas.
The Canadian dollar (CAD) saw firm profits in employment figures on Friday, with a general increase in Canadian employment exceeding the medium forecasts of the market of a contraction. However, a Non -Agricultural Payroll (NFP) report of the US stronger than expected eclipsed the Canadian economic data, giving the US dollar (USD) a very necessary rebound.
Canada’s economic data calendar is scarce next week, leaving the markets of the Canadian dollar exposed to US dollar flows. The first US inflation publication that will include the preliminary price volatility impacts of the “reciprocal” tariff package of the Trump administration, announced in early April, is scheduled to be published next Wednesday. Investors will probably become cautious before the publication of the data, which is expected to show a general increase in price pressures.
Daily summary of market movements: profits from the Canadian dollar eclipsed by the Post-NFP market reaction
- The Canadian dollar cut the recent profits against the US dollar, falling around a sixth of one percent and pushing the USD/CAD again to the 1,3700 region.
- Canada added 8.8K new net jobs in May, well above the expected 15K contraction.
- The US also added 139K new payroll positions during the same period, falling slightly of the 147K reviewed in April, but keeping well above the expected 130k.
- A wide error by investors when forecasting the work figures on Friday on both sides of the US border.-Channel reveals the fighting of analysts to accurately calculate the economic impacts of the US VAIVÉN COMMERCIAL POLICIES.
- Canada is still a large extent absent from the economic data calendar next week. However, the key inflation data of the US CPI are scheduled for next Wednesday. The US CPI is expected to increase in general, since the first exchange of April commercial tariffs by the Trump administration is expected to begin to appear in broad economic data sets.
Prognosis of the price of the Canadian dollar
The Canadian dollar remains in a firmly bullish posture against the US dollar, but the CAD bidders are increasingly difficulty maintaining the USD/CAD below the level of 1,3700 in the short term. The impulse is still favorable for the CAD, with the pair trapped in a bassist trend from the peaks of several years at the beginning of the year about 1,4800.
USD/CAD DIARY GRAPH
Canadian dollar faqs
The key factors that determine the contribution of the Canadian dollar (CAD) are the level of interest rates set by the Bank of Canada (BOC), the price of oil, the main export product of Canada, the health of its economy, inflation and commercial balance, which is the difference between the value of Canadian exports and that of its imports. Other factors are market confidence, that is, if investors bet on riskier assets (Risk-on) or seek safe assets (Risk-Off), being the positive risk-on CAD. As its largest commercial partner, the health of the US economy is also a key factor that influences the Canadian dollar.
The Canada Bank (BOC) exerts a significant influence on the Canadian dollar by setting the level of interest rates that banks can provide with each other. This influences the level of interest rates for everyone. The main objective of the BOC is to maintain inflation between 1% and 3% by adjusting interest rates to the loss. Relatively high interest rates are usually positive for CAD. The Bank of Canada can also use quantitative relaxation and hardening to influence credit conditions, being the first refusal for CAD and the second positive for CAD.
The price of oil is a key factor that influences the value of the Canadian dollar. Oil is the largest export in Canada, so the price of oil tends to have an immediate impact on the value of the CAD. Generally, if the price of oil rises, the CAD also rises, since the aggregate demand of the currency increases. The opposite occurs if the price of oil drops. The highest prices of oil also tend to give rise to a greater probability of a positive commercial balance, which also supports the CAD.
Although traditionally it has always been considered that inflation is a negative factor for a currency, since it reduces the value of money, the opposite has actually happened in modern times, with the relaxation of cross -border capital controls. Higher inflation usually leads to central banks to raise interest rates, which attracts more capital of world investors who are looking for a lucrative place to save their money. This increases the demand for the local currency, which in the case of Canada is the Canadian dollar.
The published macroeconomic data measure the health of the economy and can have an impact on the Canadian dollar. Indicators such as GDP, manufacturing and services PMIs, employment and consumer confidence surveys can influence the CAD direction. A strong economy is good for the Canadian dollar. Not only attracts more foreign investment, but it can encourage the Bank of Canada to raise interest rates, which translates into a stronger currency. However, if the economic data is weak, the CAD is likely to fall.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
