- USD/CAD trimmed a part of its intraday gains following the US/Canadian employment details.
- The USD remained well supported by renewed concerns about escalating US-China tensions.
- Weaker oil prices undermined the loonie and remained supportive of the mildly positive tone.
The USD/CAD pair edged lower during the early North American session, albeit has still managed to hold with modest daily gains around the 1.3335 region post-US/Canadian employment details.
The US dollar maintained its strong bid tone after the headline NFP came in to show that the US economy added 1.763 million jobs in July as compared to 1.6 million expected. Adding to this, the unemployment rate in the world’s largest economy also surpassed consensus estimates and dropped to 10.2% during the reported month from the 11.1% previous.
On the other hand, Statistics Canada reported that the number of employed people increased by 418.5K in July. The reading was worse than the previous month’s 952.9K rise but was slightly better than the 400K anticipated. Meanwhile, the unemployment rate in Canada also fell more than expected, to 10.9% from 12.3% previous.
However, a weaker tone surrounding crude oil prices continued undermining demand for the commodity-linked currency – the loonie. This comes amid renewed tensions between the US and China, which benefitted the USD’s relative safe-haven status and extended some support to the USD/CAD pair, at least for the time being.
With Friday’s key macro data out of the way, it will now be interesting to see if bulls are able to capitalize on the recovery move or the pair meets with some fresh supply at higher levels amid growing worries about the pace of the US economic recovery.
Technical levels to watch
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