S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
- USD/CAD edges lower as the USD pauses following the recent rise to a multi-month top.
- Reduced December Fed rate cut bets favor the USD bulls and offer support to spot prices.
- Sliding Crude Oil prices undermine the Loonie and contribute to limiting losses for the pair.
The USD/CAD pair drifts lower during the Asian session on Friday and now seems to have snapped a two-day winning streak to a nearly two-week high, levels just above the 1.4100 mark, touched the previous day. Spot prices, however, bearish conviction and remain on track to register strong weekly gains amid the underlying bullish sentiment surrounding the US Dollar (USD).
The USD Index (DXY), which tracks the Greenback against a basket of currencies, advanced to its highest level since late May on Thursday amid reduced bets for another interest rate cut by the US Federal Reserve (Fed). The expectations were reaffirmed by the delayed release of the US NFP report, which showed that the economy added 119,000 new jobs in September compared to consensus estimates for 50,000 and followed the 4,000 decrease (revised from +22,000) in August. This helps ease concerns about the softening labor market and offsets an uptick in the Unemployment Rate to 4.4% from 4.3%.
The USD bulls, however, pause for a breather on the last day of the week amid growing concerns about the weakening economic momentum on the back of the largest-ever US government shutdown. The Canadian Dollar (USD), on the other hand, continues to be undermined by data released earlier this week, which pointed to signs of easing domestic inflation pressures. Furthermore, sustained selling around Crude Oil prices undermines the commodity-linked Loonie and limits the downside for the USD/CAD pair, warranting some caution for bearish traders and positioning for any meaningful decline.
Traders now look forward to the release of monthly Canadian Retail Sales data and flash US PMIs for some impetus later during the North American session. Apart from this, speeches from a slew of influential FOMC members will be scrutinized for cues about the Fed’s rate-cut path, which, in turn, will drive the USD demand. This, along with Oil price dynamics, should contribute to producing short-term trading opportunities around the USD/CAD pair heading into the weekend. Nevertheless, spot prices seem poised to register strong weekly gains and remain close to a multi-month peak.
