USD/CAD PRICE OUTLOOK: US DOLLAR TO STAY WEAK VERSUS LOONIE FOLLOWING LATEST JOBS DATA
- USD/CAD price action pivoted nearly 30-pips lower in response to the latest employment data
- US Dollar having a bearish reaction to notably worse-than-expected nonfarm payrolls for April
- The Canadian Dollar is catching a bid despite a relatively soft jobs report out of Canada
USD/CAD is coming under pressure once again as US Dollar weakness exacerbates Canadian Dollar strength. The move looks largely sparked by a disappointing NFP report that overshadowed a miss on jobs data out of Canada just released. Headline change in nonfarm payrolls for April crossed the wires at 226K. This was far below the market forecast looking for 1-million job gains. NFPs were revised lower for March from 916K to 770K and the unemployment rate ticked slightly higher from 6.0% to 6.1% as well. The report seems a bit bleak on the surface, but after looking a bit closer at the NFP data, we can see that average hourly earnings and the labor force participation rate were bright spots.
| Change in | Longs | Shorts | OI |
| Daily | 6% | 6% | 6% |
| Weekly | -13% | -13% | -13% |
As for employment data out of Canada, the Canadian economy lost -207K jobs last month. This was lower than the consensus of -150K job losses. On balance, it seems that markets are reacting more to the disappointing NFP data as forex traders send USD/CAD price action 30-pips lower in immediate response. The US Dollar might remain weak across the board of major currency pairs with soft employment data underscoring the patiently dovish narrative being echoed by the Federal Reserve.
USD/CAD PRICE CHART: 15-MINUTE TIME FRAME (06 MAY TO 07 MAY 2021)
-- Written by Rich Dvorak, Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight
