The USD/CAD currency pair today rallied higher despite the release of positive Canadian employment data by Statistics Canada. The pair’s upward momentum is likely to have been caused by the fact that the loonie had exhausted all its previous momentum after the Bank of Canada rate hike earlier this week.
The USD/CAD pair rallied by over 100 points from its session lows signalling that the pair had hit a support level in its decline before rebounding.
The currency pair opened today’s session on a downward trend before rebounding late in the Asian session. The pair rallied higher during the European session and the release of positive Canadian labour force survey data could not reverse the pair’s upward momentum. Statistics Canada reported a 22,200 net change in unemployment as opposed to he expected 15,000 net increase. The country’s unemployment rate also declined to 6.2%, which was lower than the market consensus of 6.3%. Canada’s industrial capacity utilization rate was at 85.0% in the second quarter of 2017, up from 83.2% in the previous quarter
Canadian domestic money markets might have influenced the loonie’s decline against the greenback as the 10-year treasury yield declined to the 1.965% region, which was lower than yesterday’s 2.0% yield. The US dollar, as tracked by the US Dollar Index, was much stronger at the time of writing as it was trading at 91.34.
The currency pair’s future performance is likely to be affected by the release of Canada’s housing starts on Monday as well as global oil prices.
The USD/CAD pair was trading at 1.2129 as at 15:33 GMT having rallied from a low of 1.2057 earlier today. The CAD/JPY pair was trading at 88.86 having dropped from a high of 89.66.
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