USD/CAD looks to continue the losing streak, hovers near 1.3650
|
- USD/CAD loses ground on the likelihood of no interest rate hike by the US Fed in December.
- US Dollar lost strength due to weaker US economic data released in the previous week.
- BoC is expected to keep interest rates higher for a prolonged period.
USD/CAD aims to lose ground on the fourth consecutive day to continue the losing streak, treading waters near 1.3650 during the Asian hours on Monday. The pair faces downward pressure amid expectations that the US Federal Reserve (Fed) might halt its monetary policy tightening, prompted by the subdued employment data from the United States (US).
On the Canadian side, the weaker labor data could weigh on the Loonie Dollar (CAD). The employment Change released by Statistics Canada on Friday revealed that Net Change in Employment reduced to the figure of 17.5K in October, falling short of 22.5K expectations from 63.8K in September. While Unemployment Rate increased to 5.7% from 5.5% prior.
In a statement last week, Bank of Canada (BoC) Governor Tim Macklem mentioned that indications are suggesting the neutral interest rate is more likely to be higher than lower.
US Dollar Index (DXY) hovers around 105.10, at the time of writing, showing a significant drop of over 1.0% in the previous session. The weakness in the US Dollar (USD) can be attributed to lackluster US Treasury yields, a reaction to disappointing US labor data.
US Non-Farm Payrolls (NFP) data might have cheered up the investors, as they've been anticipating a slowdown in economic data to persuade the US Fed that additional rate hikes are unnecessary. The report revealed a figure of 150K, falling short of the expected 180K and marking a significant decline from the 297K recorded in September.
Additionally, the US Unemployment Rate rose to 3.9%, going against the market's anticipation of remaining stable at 3.8% in October. The ISM Services Purchasing Managers' Index (PMI) declined from the previous 53.6 to 51.8. On Thursday, the US Department of Labor published the count of initial claims for unemployment benefits for the week ending October 27, indicating a rise from 212K to 217K.
Investors will likely watch Canada's Ivey Purchasing Managers Index scheduled to be released on Monday. Furthermore, the US Michigan Consumer Sentiment Index will be eyed later in the week.
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.