USD/CAD recovers above on 1.3600 on USD strength

• USD/CAD recovers above 1.3600 during American session on Thursday.
• Nonfarm Payrolls in the US increased more than expected in June.
• Manufacturing PMI in Canada improved sharply in June.

The USD/CAD pair struggled to make a decisive move in either direction during the early American session and continued to fluctuate in a tight range. However, with the greenback gathering strength in the last hour, the pair rose above 1.3600 and was last seen gaining 0.21% on the day at 1.3613.

DXY gains traction on coronavirus worries

The data published by the US Bureau of Labor Statistics on Thursday revealed that Nonfarm Payrolls (NFP) surged by 4.8 million in June and the Unemployment Rate retreated to 11.1% from 13.3%. Although the upbeat jobs report boosted risk flows and weighed on the USD, the latest coronavirus figures from the US caused a shift in sentiment.

Florida reported more than 10,000 COVID-19 cases on Thursday, the biggest daily increase since the beginning of the pandemic. The US Dollar Index (DXY), which dropped below 97.00 with the initial reaction to the NFP data, is now up 0.1% on the day at 97.25.

On the other hand, Statistics Canada reported that Canada’s international trade deficit narrowed to $677 million in May and came in much better than the market expectation for a deficit of $3 billion. Additionally, Markit Manufacturing PMI for Canada improved sharply from 40.6 in May to 47.8 in June. These data seem to be helping the loonie limit its losses against the USD for the time being.

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