The Canadian dollar gained ground on Friday, after outstanding employment data. The economy created a whopping 106.5 thousand jobs in April, crushing the estimate of 11.7 thousand. This marked the first gain above the lofty 100K level since April 2010. The pace of purchasing activity continued to accelerate, as Canadian Ivey PMI improved to 55.9 in April, up from 54.3 a month earlier. This easily beat the forecast of 51.5.
In the U.S, the focus was on inflation. The producer price index slowed to 0.2% in April, down from 0.6% a month earlier. The core release also lost ground, dropping from 0.3% to 0.1%. This was followed by consumer inflation reports. CPI dropped from 0.4% to 0.3%, shy of the estimate of 0.4%. The core release remained stuck at 0.1%, short of the estimate of 0.2%.
President Donald Trump made good on his tariff threat, as the U.S. raised tariffs on $200 billion worth of Chinese goods on Friday, from 10% to 25%. Trump announced the move on Sunday, which sent shock waves across equity markets during the week. Risk appetite dropped, but the Canadian dollar was spared, managing to hold its own last week.
USD/CAD daily chart with support and resistance lines on it. Click to enlarge: