USD/CAD gyrates above 1.3600 after US/Canada Employment release
|- USD/CAD turns volatile after the release of the US/Canada Employment report for June.
- US wage growth momentum slowed expectedly while employment numbers beat estimates.
- Canada’s labor market witnessed drawdown while Average Hourly Earnings accelerated.
The USD/CAD pair exhibits wild moves above the round-level support of 1.3600 in Friday’s American session. The Loonie asset turns volatile after the release of the United States/Canada Employment data for June.
The US Nonfarm Payrolls (NFP) report showed that labor demand remained stronger-than-expected. Number of workers hired were 206K, higher than the estimates of 190K but lower than the prior release of 272K. The Unemployment Rate rose to 4.1% from the estimates and the prior release of 4.0%.
Meanwhile, Average Hourly Earnings slowed expectedly. Annually, the wage growth momentum decelerated to 3.9% from the prior release of 4.1%. This has eased fears of price pressures remaining persistent. It would also boost expectations of early rate cuts by the Federal Reserve (Fed). Currently, financial markets expect that the Fed will start reducing interest rates from the September meeting.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, remains on the backfoot near 105.00. 10-year US Treasury yields fall sharply to near 4.30%.
In Canada, the labor market faced an unexpected drawdown as 1.4K employees were laid-off. Economists expected the labor market to have witnessed addition of 22.5K payrolls lower than May’s reading of 26.7K. The Unemployment Rate rose at a faster pace to 6.4% from the estimates of 6.3% and the prior release of 6.2%.
Average Hourly Earnings grew strongly by 5.6% from the former reading of 5.2%. This would diminish expectations of subsequent rate cuts by the Bank of Canada (BoC). The BoC delivered its first rate-cut decision in June after maintaining a restrictive interest rate framework for more than four years.
Economic Indicator
Average Hourly Wages (YoY)
The Average Hourly Wages, released by Statistics Canada, measures the increase in the salaries earned by permanent employees in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending, which stimulates economic growth. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.
Read more.Last release: Fri Jul 05, 2024 12:30
Frequency: Monthly
Actual: 5.6%
Consensus: -
Previous: 5.2%
Source: Statistics Canada
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.