- The dollar is recovering from four consecutive daily losses against the Canadian dollar.
- Market sentiment is mixed, pushing the US dollar.
- Falling oil and energy prices weaken the Canadian dollar’s rise against the dollar.
After posting losses for four days in a row, the USD / CAD It barely advanced 0.03%, trading at 1.2586 during the US session at the time of writing.
Market sentiment has been abysmal all day. Rising oil and gas prices, US political uncertainties and tightening monetary policy by central banks kept investors nervous.
However, as the New York session progresses, it appears that market sentiment is showing some improvement. Recent news about Republican Senator McConnell, who leads the Republicans, came to light with a plan to propose a short-term solution to the debt ceiling crisis.
The market reaction to that news was positive. The S & P500, the Dow Jones Industrial and the Nasdaq cut their losses, they are gaining 0.13%, 0.05% and 0.43%, respectively.
Western Texas Intermediate (WTI) crude oil, which is strongly correlated to the Canadian dollar, is down nearly 2% and is trading at $ 76.88, weighing on the USD / CAD pair. The US dollar index, which tracks the performance of the dollar against its peers, exerts additional pressure on the pair and advances 0.28%, standing at 94.24.
ADP’s job change in the US exceeded analysts’ expectations
On the US macroeconomic front, the ADP job change for September rises to 568,000, better than the 428,000 forecast by analysts. According to Nela Richardson, ADP’s chief economist, the labor market recovery is progressing despite a slowdown from the 748,000 work pace in the second quarter. In addition, he added that the labor shortage should disappear as health conditions linked to the COVID-19 variant improve.
The report appears to be in tune with Federal Reserve Chairman Jerome Powell on the job market. However, it typically deviates from reading Nonfarm Payrolls, leaving investors guessing its validity.
On Friday, the US economic docket will feature the Non-Farm Payrolls report. The market expects the creation of 488,000 new jobs in the economy. If the result is achieved, investors could expect a bond reduction announcement at the November FOMC meeting.
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