- USD/CAD consolidated today after bouncing from multi-month lows yesterday.
- US ISM surprise supported the dollar.
- Oil-price strength helps the Loonie.
The USD/CAD was trading just above mid-1.3000s after consolidating in the early European session following yesterday’s bounce of around 90 pips from sub-1.3000 – the lowest level since January.
The pair is being pushed up by the US dollar demand after the better than expected US ISM Manufacturing PMI on Tuesday stimulated hopes of US economic recovery. But, the USD/CAD couldn’t benefit much from the bullishness as Canadian dollar showed strength on the back of bullish tone in the crude oil.
It will be worthwhile to wait for further strength in the pair before a bottom is confirmed for the near-term. The dovish Fed will keep rates lower for longer limiting any potential dollar gains. The US ADP report is due today and will provide some action during the North American session trading.
But, a firm direction in the market will have to wait for the US monthly jobs report – also termed as NFP. Canadian employment numbers and NFP, both due on Friday, will determine the next phase of USD/CAD trading direction.