USD/CAD drops to fresh daily lows below 1.2540 after strong Canadian jobs report

• USD/CAD remains on track to close second straight day in the red.
• Unemployment Rate in Canada declined to 7.5% in March.
• US Dollar Index clings to small daily gains around 92.20.

After rising above 1.2600 earlier in the day, the USD/CAD pair reversed its direction as the upbeat labour market data from Canada provided a boost to the loonie. As of writing, the pair was trading at a fresh daily low of 1.2535, losing 0.22%.

CAD capitalizes on impressive data

The monthly data published by Statistics Canada showed on Friday that the Unemployment Rate in March dropped to its lowest level since the beginning of the pandemic at 7.5%, compared to analysts’ estimate of 8%, from 8.2%. Further details of the jobs report revealed that employment increased by more than 300,000 during that period.

On the other hand, the US Dollar Index (DXY) edged lower from session highs as the 10-year US Treasury bond yield, which gained more than 4% earlier in the day, lost traction. Currently, the DXY is clinging to small daily gains at 92.20 and the 10-year US T-bond yield is up 2%.

The US Bureau of Labor Statistics reported earlier in the day that the Core Producer Price Index (PPI) advanced to 3.1% on a yearly basis in March. Although this reading surpassed the market expectation of 2.7%, it failed to trigger a noticeable market reaction.

Meanwhile, the barrel of West Texas Intermediate (WTI) continues to move in a three-day-old horizontal channel below $60, not having an impact on the CAD’s market valuation ahead of the weekend.

Technical levels to watch for