USD/CAD returns to 1.3230 after spiking to 1.3274 on dismal Canadian jobs data
- Unemployment rate in Canada rises to 5.7% in July.
- Crude oil extends recovery, WTI rises above $54.50.
- US Dollar Index remains on track to finish week in red.
Following the disappointing labour market data from Canada, the USD/CAD pair rose sharply to a daily high of 1.3274 amid the strong selling pressure witnessed on the Loonie but failed to preserve its momentum and turned flat near 1.3230 later in the American session.
Rising crude oil prices support CAD
Statistics Canada today announced that the unemployment rate in Canada rose to 5.7% in July with the net change in employment coming in a -24,200 and missing the market expectation of 12,500 by a wide margin.
Commenting on the data, “Things must still be kept in perspective following outsized employment gains in H1 2019," said Matthieu Arseneau, an analyst at National Bank of Canada. "Despite the July drop, employment in Canada is still up 223K so far this year. No less than 205K of these jobs are full-time positions and 143K are coming from the private sector (best first seven months of the year since 2011).”
The sharp rebound seen in crude oil prices allowed the commodity-related Loonie to quickly erase its losses and caused the pair to reverse its direction. As of writing, the barrel of West Texas Intermediate is u 3.2% on the day at $54.57. The weekly data published by the General Electric Co's Baker Hughes energy services showed that the number of active oil rigs in the US declined for the sixth straight week to support crude oil's rebound.
In the meantime, the uninspiring Producer Price Index data from the US and President Donald Trump's recent comments about the lack of progress in trade negotiations and possibly calling next round of face-to-face talks in September in Washington off weighed on the Greenback.
At the moment, the US Dollar Index is down 0.06% on the day and is now looking to bring an end to its three-week winning streak.
Technical levels to watch for