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The Canadian Dollar (CAD) extends its gains for the second straight day on Thursday. Disappointing US jobless claims data, fueling hopes for potential June Fed rate cuts, continues to weigh on the US Dollar (USD). This market sentiment has limited the US Treasury yield rebound, further pressuring the greenback.

Fed Comments vs. Market Expectations

Philadelphia Fed President Patrick Harker cautions that inflation remains too high for rate cuts, echoing earlier remarks by Fed Chair Powell. However, their impact on the USD appears muted as market focus remains on Friday’s crucial US Nonfarm Payrolls (NFP) report. Further commentary from Fed policymakers is expected throughout the day.

Canadian Trade Data Boosts CAD

Canada’s trade surplus surpassed expectations in February due to a robust increase in exports, providing additional support to the CAD.

Market Movers: USD/CAD Continues Downward Trend

The Canadian Dollar’s bullish momentum intensifies, appreciating nearly 0.6% over two days and reaching fresh two-week highs.

Key US Figures:

  • Initial Jobless Claims rose by 222K in the week ending March 29, exceeding the 214K forecast.
  • The previous week’s claims were revised upward to 212K from 210K.

Canadian Trade Numbers:

  • Trade surplus expanded to $1.39 billion in February from $0.61 billion in January, above the $0.8 billion market forecast.

NFP Report: The Next Catalyst

Friday’s US Nonfarm Payrolls are expected to show 200K jobs added in March, down from February’s 275K gain.

Technical Outlook: USD/CAD Tests Trendline Support

USD/CAD approaches the trendline support at 1.3460 following disappointing US data releases. The pair remains within an ascending channel. A weak US NFP report could trigger a break below 1.3460, targeting 1.3415 and 1.3360. Key upside resistance levels are 1.3530 and 1.3585.

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