- The USD/CAD faces sales pressure while the US dollar has a lower yield after US NFP data.
- The hiring in the private sector was significantly slowed, while hiring in the public sector was surprisingly robust.
- The imposition of higher tariffs by the US to Canada will affect the prospects for the Canadian dollar.
The USD/CAD torque is brought down near 1,3570 during the European session on Friday, with the aim of revising the minimum of eight months around 1,3540. The Lonie Par faces sales pressure while the US dollar (USD) returns all its profits behind non -agricultural payroll data (NFP) of the US for June for June, published on Thursday.
The US dollar index (DXY), which tracks the value of the dollar against six main currencies, falls below 97.00.
According to the NFP report, the strong labor hiring in the public sector led to a significant increase in the general employment data, while hiring in the private sector was considerably slowed down. In total, the workers added in June were 147K, more than the 110K estimates. However, employment search engines hired by private employers were 74K, almost half of the 137K recorded in May, and well below if compared to the average of three months of 115k.
Although investors have supported the Canadian dollar (CAD) against the US dollar, it is having a lower yield compared to other peers amid the uncertainty around the deadline of tariffs on July 9. The Canadian economy has not yet ended any commercial agreement with the USA and it is likely that higher tariffs from next week.
Canadian dollar today
The lower table shows the change percentage of the Canadian dollar (CAD) compared to the main currencies today. Canadian dollar was the weakest currency against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.19% | -0.16% | -0.39% | -0.09% | 0.08% | -0.04% | -0.32% | |
| EUR | 0.19% | 0.06% | -0.17% | 0.14% | 0.16% | 0.15% | -0.09% | |
| GBP | 0.16% | -0.06% | -0.26% | 0.07% | 0.11% | 0.09% | -0.15% | |
| JPY | 0.39% | 0.17% | 0.26% | 0.32% | 0.34% | 0.29% | -0.02% | |
| CAD | 0.09% | -0.14% | -0.07% | -0.32% | 0.01% | 0.01% | -0.22% | |
| Aud | -0.08% | -0.16% | -0.11% | -0.34% | -0.01% | -0.06% | -0.26% | |
| NZD | 0.04% | -0.15% | -0.09% | -0.29% | -0.01% | 0.06% | -0.23% | |
| CHF | 0.32% | 0.09% | 0.15% | 0.02% | 0.22% | 0.26% | 0.23% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Canadian dollar of the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the CAD (base)/USD (quotation).
The USD/CAD continues to face sales pressure at each attempt over the 20 -day exponential (EMA) mobile average, which suggests a tendency to “sell in the rebound.” The 14 -day relative force (RSI) index falls below 40.00, suggesting that a new bearish impulse has been activated.
Looking ahead, the asset could slide to the psychological level of 1,3500 and the minimum of September 25, 1,3420 if it breaks below the minimum of June 16, 1,3540.
On the contrary, an upward movement above the maximum of May 29, 1,3820 would open the door to the maximum of May 21, 1,3920, followed by the maximum of May 15, 1.4000.
USD/CAD DAILY GRAPH
US Dollar – Frequently Questions
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
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.
