Usd / Cad - Canadian Dollar Awaiting Us And Canadian Employment Data

(MENAFN- Baystreet.ca) USD / CAD - Canadian dollar awaiting US and Canadian employment data

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- Traders hoping NFP report confirms ADP data.
- Canada expected to have gained 20,000 jobs in June.
- US dollar opens mixed but rallies against commodity currency bloc.
USDCAD snapshot: open 1.3371-75, overnight range 1.3360-1.3385, close 1.3367, WTI $72.17, Gold $1916.26.
Yesterday, the Canadian dollar experienced a rapid decline, weighed down by surging Treasury yields, which indicated that US interest rates would rise higher and remain elevated for a longer duration than previously expected.
This rally in US Treasury yields followed a series of impressive employment reports from America. Notably, the Challenger job cuts data, the ADP employment change report, and weekly jobless claims remaining below 250,000 all seemed to support the Federal Open Market Committee's (FOMC) outlook of at least two more rate increases in 2023. This sentiment gained additional support when the ISM Services report revealed a faster-than-expected growth in the sector.
The Canadian dollar also faced pressure due to the perception that the Bank of Canada (BoC) might keep interest rates unchanged in the upcoming week, following their increase in June. However, today could potentially bring a change in this view if the Canadian employment data, forecasted at 20,000 jobs compared to the previous -17,000, proves to be significantly stronger than expected.
In other markets, US stock markets closed with losses, led by a 1.07% drop in the Dow Jones Industrial Average. Following this lead, major Asian equity indexes also experienced negative closes, with Australia's ASX 200 leading the way with a 1.69% decline.
European bourses are currently trading with caution and exhibiting a mixed tone. The French and German indexes show modest gains, while the UK FTSE100 is down 0.21%. S&P 500 futures are slightly lower.
Bond traders have downgraded the risk of a US recession, as evidenced by the US 10-year yield trading at 4.062%, a substantial jump from Wednesday's level of 3.60%. Meanwhile, the EURUSD pair traded within a quiet range of 1.0868-1.0899. The news of a 0.2% decline in German Industrial Production, compared to a 0.3% gain in April, had minimal impact. Traders eagerly await today's US data for further market direction.
GBPUSD remained stable within a range of 1.2727-1.2764. The prices continue to be supported by the prospect of UK interest rates rising by another 150 basis points to 6.5%. Despite UK house prices falling by 2.6% in the three-month period ending in June, the largest decline since 2011, this news did not affect GBPUSD traders significantly.
In contrast, USDJPY took center stage as it plunged from 144.19 to 142.88, despite the surge in US Treasury yields. This move was triggered by higher wage earnings (2.5% compared to a forecast of 0.7%), which may provide the Bank of Japan (BoJ) with room to adjust monetary policy.
AUDUSD traded within a narrow range of 0.6622-0.6648 as it consolidated losses from the previous day. The outlook of higher US interest rates weighed on commodity prices and commodity currencies as well.





















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