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Canadian Dollar Weakens Against US Dollar on Upbeat NFP Data

August 7, 2020 at 13:28 by Simon Mugo

Some Canadian dollar bills

The Canadian dollar today lost ground against its southern neighbour driven by the upbeat US nonfarm payrolls report for July released in the American session. The USD/CAD traded higher boosted by the risk-off investor sentiment in the face of rising US-China tensions but gave up some of its initial gains as the loonie clawed higher.

The USD/CAD currency pair today rallied from an opening low of 1.3306  to a high of 1.3373 during the Asian session before losing some of its gains, then rallying higher.

The currency pair’s initial rally was fueled by the escalating US-China tensions after President Donald Trump signed executive orders banning Chinese social media apps TikTok and WeChat from operating in the United States. The falling North American crude oil prices as tracked by the West Texas Intermediate, which hit a low of 41.33, also contributed to the loonie’s woes. The release of the upbeat Canadian labour force survey for June boosted the loonie slightly. According to Statistics Canada, the country added 418,500 jobs in June beating analysts’ estimates of 400,000 jobs. Canada’s unemployment rate also fell to 10.9% from 12.3%

The release of the upbeat US non-farm payrolls report by the Bureau of Labor Statistics also boosted the pair as the US added 1.76 million jobs versus the expected 1.6 million jobs in July. Hence, lifting the greenback as tracked by the US Dollar Index

The loonie’s performance over the upcoming weekend is likely to be affected by crude oil prices and US dollar dynamics.

The USD/CAD currency pair was trading at 1.3373 as at 13:27 GMT, having risen from a low of 1.3306. The CAD/JPY currency pair was trading at 79.06, having fallen from a high of 79.34.

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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