- The USD bulls remained on the defensive amid the ongoing slide in the US bond yields.
- A modest uptick in Crude Oil prices underpinned the Loonie and exerted some pressure.
- The downside is likely to remain limited ahead of the closely watched US jobs report.
The USD/CAD pair edged lower on Friday, albeit remained well within its consolidative trading range just below one-month tops set in the previous session.
After an initial dip to the 1.3300 neighbourhood, the pair managed to regain some positive traction on Thursday and added to the overnight strong gains. The uptick remained well supported by weaker Crude Oil prices, which undermined demand for the commodity-linked currency – Loonie, albeit the prevalent US Dollar selling bias kept a lid on any strong follow-through.
Weighed down by an uptick in Oil prices/subdued USD
Against the backdrop of growing market expectations that the Fed will cut interest rates again in October, the ongoing slide in the US Treasury bond yields to one-month lows kept exerting some downward pressure on the Greenback. This coupled with a modest uptick in Crude Oil prices further collaborated to the pair’s weaker tone on the last trading day of the week.
The pullback, however, is likely to remain limited as investors might now refrain from placing any aggressive bets ahead of Friday’s key release of the US monthly jobs report. The headline NFP is expected to show that the US economy added 145K jobs in September and the unemployment rate is anticipated to hold steady at 3.7.
Meanwhile, the closely watched wage growth data, anticipated to have risen by 3.2% year-on-year rate during the reported month, should play an important role in influencing the USD price dynamics and eventually provide some fresh impetus for the pair’s next leg of a directional move.
Technical levels to watch
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