- USD/CAD loses ground near 1.3577 amid the USD weakness.
- The US weekly Initial Jobless Claims increased 220K vs. 218K prior, Continuing Claims eased from 1.925M to 1.861M.
- Bank of Canada (BoC) held interest rates steady at its December meeting while opening the door for further hikes.
- The US Nonfarm Payrolls and Unemployment Rate will be in the spotlight on Friday.
The USD/CAD pair trades on a negative note during the early European session on Friday. The pair remains capped under the 50-day Exponential Moving Average (EMA) barrier near 1.3600. At press time, USD/CAD is trading at 1.3577, down 0.13% on the day.
The Federal Reserve (Fed) Chair Powell has cited optimistic supply-side developments as contributing to lower inflation pressures. This viewpoint is supported by an upsurge in productivity growth in the third quarter of 2023, which resulted in a substantial drop in unit labor costs. The markets believe the Fed's current restricted monetary policies will squeeze demand and ensure the recent drop in inflation continues. Therefore, the markets believe the Fed is done hiking the cycle.
On Thursday, the weekly US Initial Jobless Claims increased 220K in the week ending December 2 from the previous week of 218K, while the Continuing Claims eased to 1.861M from the previous week of 1.925M. Market players will take more cues from the US employment data on Friday for fresh impetus.
On the Loonie front, the Bank of Canada (BoC) held interest rates steady at its December meeting, while opening the door for further hikes. The central bank stated that further signs that monetary policy is moderating spending and alleviating price pressures prompted the central bank to hold the policy rate at 5% and continue to normalize the bank’s balance sheet. The BoC is concerned about the risks to the inflation outlook and is prepared to hike the policy rate further if needed.
Meanwhile, the recovery of oil prices might boost the commodity-linked Loonie, as the country is the leading oil exporter to the US.
Traders will keep an eye on the US Nonfarm Payrolls, which is expected to add 180K jobs in November. Also, the Unemployment Rate is estimated to remain steady at 3.9%. These events could trigger the volatility in the market and give a clear direction to the USD/CAD pair.
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 treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.