USD/CAD: Greenback Consolidates Gains After Weak Labour Market Fuels Easing Bets for Loonie

The US dollar is slightly outperforming the Canadian dollar and has been overall mixed against other major currencies in today’s trade. Banks in both countries are closed in observance of Veterans Day, the day World War I ended.

The lower liquidity has left its marks on the USD/CAD pair, which is up only 0.02% from Friday’s close. As of 2:10 p.m. London time, the US dollar traded at 1.3228 against the loonie.

During the Asian session, the pair fluctuated in a very tight range between 1.3218 and 1.3233, giving markets time to scrutinize Canada’s employment data and consolidate greenback’s gains. The data, which showed a net loss of 1.8K jobs vs market expectations of a 14.7K gain, fueled bets of a rate cut by the Bank of Canada and weighed on the Canadian currency.

The pair will likely remain calm to slightly bullish ahead of the US CPI report on Wednesday and the BoC Governor Poloz’s speech on Friday. The speech will be closely followed by markets as Governor Poloz can, if he chooses so, give hints on future BoC moves.

Meanwhile, the latest CoT report showed that investors reduced bearish bets on the loonie by C$462 million and increased long positions by C$579 million last week. However, the data doesn’t reflect position changes after the weak labour data statistics from Canada.

From a technical standpoint, the USD/CAD pair is trading near the 61.8% Fib level, measured from the top to the bottom of the October downturn. A break above that level could push the price up to the October highs around 1.3345. To the downside, the pair looks well supported by 1.3200.

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