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Canadian Dollar Rallies Against US Peer, Later Falls on Jobs Data

September 4, 2020 at 13:37 by Simon Mugo

Canadian 50- and 100-dollar bills

The Canadian dollar today surged against its US peer erasing yesterday’s losses boosted by the rising crude oil prices, which fueled the commodity-linked loonie. The USD/CAD currency pair later recovered and rallied higher as the loonie reacted to Canadian employment data, which was worse than expected.

The USD/CAD currency pair today fell from an initial high of 1.3139 to a low of 1.3077 in the mid-European session before reversing and heading higher in the American market. 

The currency pair headed lower earlier today driven by the surge in American crude oil prices as tracked by the West Texas Intermediate, which rose to a high of 41.85. The currency pair bounced nicely from the major support zone around the 1.30 on Monday level and has trended higher since then. The loonie has been more potent against the dollar since mid-June resulting in an extended downtrend. The release of the Canadian unemployment rate for August by Statistics Canada fueled the pair’s recovery. The print came in at 10.2%, which was higher than the expected 10.1% print. Canada’s economy also added 245,800 jobs, which was lower than consensus estimates of 275,000 jobs.

The fact that the US non-farm payrolls report for August came in at 1.37 million versus the median estimate of 1.4 million jobs limited the pair’s gains. However, the upbeat unemployment and employment data released by the Bureau of Labor Statistics boosted the pair.

The currency pair’s performance over the upcoming weekend is likely to be affected by crude oil prices and geopolitical events.

The USD/CAD currency pair was trading at 1.3100 as at 13:36 GMT, having fallen from a high of 1.3139. The CAD/JPY currency pair was trading at 81.25, having risen from a low of 80.74.

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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