- USD/CAD has been helped by the release of monthly US employment data.
- The US economy added 528,000 jobs in July, and the unemployment rate fell to 3.5%.
- The dismal Canadian jobs report overshadows the rebound in oil prices and does not benefit the loonie.
The pair USD/CAD capitalize on the positive movement overnight and gain some traction for the second day in a row on Friday. Intraday buying accelerates in reaction to the positive monthly US employment report and pushes spot prices to a near two-week high, approaching 1.2950 during the early American session.
Headline NFP data showed the US economy added 528,000 jobs in July, beating more optimistic estimates and market expectations for a 250,000 increase. Furthermore, the previous month’s reading was also revised higher to 398,000 from 372,000, while the unemployment rate also surprisingly fell to 3.5% from 3.6% in June.
Other data revealed that the median hourly wage increased by 5.2% year-on-year and pointed to a further rise in inflationary pressures. Stronger data revives bets on a big Fed rate hike at the September meeting and pushes up US Treasury yields, which, in turn, is giving a nice boost to the American dollar.
On the other hand, weaker Canadian employment data weighs on the national currency and turns out to be another factor contributing to the sudden rise in the USD/CAD pair in recent hours. Statistics Canada reported that the number of employed people fell by 30,600 in July against estimates of an additional 20,000 jobs.
The combination of the above factors overshadows a modest rally in crude oil prices, which fails to support the commodity-linked loonie or hamper positive movement in the USD/CAD pair. This, in turn, supports the prospects for a further intraday appreciation move, which should allow the bulls to reclaim the psychological 1.3000 level.
Technical levels
Source: Fx Street
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