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Canadian Dollar Rallies on Jobs Report and Oil Prices, Ignores US Data

June 5, 2020 at 17:36 by Simon Mugo

Some Canadian dollar bills

The Canadian dollar today extended its rally against the US dollar after the release of surprisingly good employment data for May. The USD/CAD currency pair fell even though the US economy reported better than expected jobs numbers.

The USD/CAD currency pair today fell from an opening high of 1.3541 in the Asina session to a low of 1.3390 in the American session after the jobs report from both Canada and the US. 

The currency today headed lower as the loonie was bid up by investors as global crude oil prices headed higher as tracked by the West Texas Intermediate, which hit a high of — today. The improved risk appetite also boosted the pair as investors shrugged off the rising tensions between China and the US as the two countries banned flight originating from either country. The loonie rallied after Statistics Canada released the latest jobs report indicating that the nation added 289,000 jobs in May. The unemployment rate also edged lower to 13.7% versus the expected 15%. The positive Canadian Ivey purchasing managers index for May also boosted the loonie.

The release of the upbeat US non-farm payrolls report by the Bureau of Labor Statistics could not stop the pair’s decline despite the country adding an impressive 2.5 million jobs. The pair has since recouped some of its losses as the US Dollar Index inches higher.

The currency pair’s future performance is likely to be affected by crude oil prices and geopolitical events.

The USD/CAD currency pair was trading at 1.3437 as at 17:35 GMT having fallen from a high of 1.3541. The CAD/JPY currency pair was trading at 81.64, having rallied from a low of 80.23.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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