The USD/CAD has pared its biggest weekly gains in three weeks, snapping a four-day rise.
WTI strength is battling a drop in the US dollar amid gloomy market mood.
In June, Canadian employment numbers point to a healthy recovery.
During Friday’s Asian session, the USD/CAD eases from an 11-week high to 1.2530, down 0.05 percent intraday. Concerns over the coronavirus (COVID-19) weighed on commodity-linked currencies, sending the loonie pair back to a multi-day high. However, the recent decline in the quotation has been caused by cautious sentiment ahead of critical Canadian data.
Although recent headlines from Canada haven’t been as bleak, fears of a Delta version are all-pervasive and cast doubt on the country’s economic recovery prospects. Over half of viral infections in the United States in the last two weeks have been strains, and the same fears are putting the UK’s unlock plans to the test. Furthermore, Australia, Thailand, and Indonesia are among the countries that have lately been affected by the viral version.
Antipodeans like the AUD, NZD, and CAD also drown as economic uncertainties weigh on commodities, increasing USD/CAD rates. The couple buyers did so despite the fact that crude oil, Canada’s major export, has remained strong.
WTI oil prices, on the other hand, rebounded from a three-week low the previous day, owing to a weaker-than-expected official inventory level provided by the US Energy Information Administration (EIA).
It’s worth noting that the previous day’s equities and Treasury yields both reflected a risk-off sentiment, with S&P 500 Futures paused to the downside by press time.
In the coming months, it will be important to pay attention to the headlines, as well as the Canadian jobs report for June. According to forecasts, the headline Net Employment Change will increase by 195K, reversing the previous contraction of 68K, while the unemployment rate will likely fall from 8.2 percent to 7.7 percent.
Check out this article: Canadian Job Prospects: Is the USD/CAD set to decline as a result of the summer hiring boom?
USD/CAD bulls may be cautious unless they overcome a two-month-old resistance line, around 1.2545, on a daily closing basis. Bears, on the other hand, may want to hold off on entering until the price holds above the prior resistance line from late January, near 1.2430./n
