- USD/CAD gains ground due to the expectations of the Fed keeping higher rates for longer.
- US Treasury yields lost ground after the release of weak US Initial Jobless Claims on Thursday.
- BoC Governor Tiff Macklem highlighted the resilience of the financial system following the release of the Financial Stability Report.
The USD/CAD pair edges higher to near 1.3690 during the Asian trading hours on Friday. The upward correction in the US Dollar (USD) supported the pair, which could be attributed to the hawkish sentiment surrounding the Federal Reserve (Fed) to keep higher interest rates for an extended period.
However, the Greenback faced a challenge due to the lower US Treasury yields, which could be attributed to the weak US Initial Jobless Claims released on Thursday. The US Bureau of Labor Statistics (BLS) released data indicating that the number of individuals filing for unemployment benefits exceeded expectations. Initial Jobless Claims for the week ending May 3 rose to 231,000, surpassing estimates of 210,000 and showing an increase from the previous week's reading of 209,000.
Furthermore, the preliminary Michigan Consumer Sentiment Index for May is due on Friday, with forecasts indicating a slight decrease. This index is a survey that evaluates sentiment among US consumers, encompassing three primary areas: personal finances, business conditions, and buying conditions.
On the Canadian side, the Bank of Canada (BoC) released its Financial System Review (FSR) on Thursday. BoC Governor Tiff Macklem emphasized that Canada's financial system remains resilient. However, Macklem cautioned about potential volatility in global markets as expectations evolve regarding the extent and timing of rate cuts. He also noted that financial institutions still have adjustments to make to higher rates and potential shocks, which pose risks to financial stability.
BoC Deputy Governor Carolyn Rogers additionally observed that while the number of small businesses reporting insolvencies has risen, the Bank of Canada (BoC) does not perceive this as having broader implications for the Canadian economy.
The improved crude Oil prices may provide support for the Canadian Dollar (CAD) as Canada is the largest Oil exporter to the United States (US), limiting the advance of the USD/CAD pair. Western Texas Intermediate (WTI) Oil price trades around $79.40 on Friday. The black Gold edges higher amid optimism about rising demand in China and the US, the world's two biggest crude-consuming nations.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
![EUR/USD stays below 1.1100, looks to post weekly losses](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/european-euro-coin-on-top-of-american-dollar-bill-11292130_XtraSmall.jpg)
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
![GBP/USD struggles to find a foothold, trades near 1.3150](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-157771037_XtraSmall.jpg)
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
![Gold retreats toward $2,500 ahead of the weekend](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-bars-50657756_XtraSmall.jpg)
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
![Week ahead – Investors brace for NFP amid Fed rate cut speculation](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/america-back-to-work-gm178972493-25143312_XtraSmall.jpg)
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
![Easing Eurozone inflation to back an ECB rate cut in September](https://editorial.fxstreet.com/images/Macroeconomics/Countries/Europe/Eurozone_countries/Eurozone/eu-flags-flying-at-the-european-commission-building-brussels-belgium-24759579_XtraSmall.jpg)
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.