On Friday, the global markets were in turmoil as the US released disappointing labor and wages figures. The US Nonfarm Payrolls (NFP), wages, and unemployment numbers all fell short of expectations, leading to concerns of a possible “hard landing” scenario in the US in the near future.
With limited data releases in Canada, the Canadian Dollar (CAD) is facing uncertainty until next Friday’s Canadian labor data is released. As the US economic figures deflate, market flows are expected to continue affecting the CAD as traders adjust their positions.
US NFP Misfire Guarantees Fed Rate Cut in September
- The US added only 114K net new employment positions in July, well below the forecast 175K.
- The US Unemployment Rate rose to 4.3% in July, the highest since November 2021.
- Average Hourly Earnings grew by 0.2% MoM in July, below the expected 0.3%.
- Annualized wages increased by 3.6%, lower than the forecast 3.7%.
- US Factory Orders contracted by -3.3% MoM in June, worse than the forecast -2.9%.
- Rate markets are now pricing in a 75% chance of a double rate cut by the Federal Reserve in September.
Technical Analysis: Canadian Dollar in Flux Against Major Currencies
The CAD is down against the Euro, Yen, and Franc but slightly up against the US Dollar. USD/CAD is hovering around the 1.3850 level, showing bullish momentum despite recent fluctuations.
Canadian Dollar FAQs
Factors influencing the CAD include interest rates set by the Bank of Canada, Oil prices, economic health, inflation, trade balance, and market sentiment. The US economy also plays a significant role in CAD movements.
Overall, the recent US NFP miss and economic data releases have led to market uncertainty and volatility, impacting the CAD and potentially leading to a Fed rate cut in September. Traders should monitor upcoming Canadian labor data and Fed announcements for further insights into the CAD’s performance.