The USD/CAD pair was closed at 1.35980 after placing a high of 1.3616 and a low of 1.35211. Overall the movement of the USD/CAD pair remained bullish throughout the day. At 17:30 GMT, the ADP Non-Farm Employment Change for May from Canada was reported as 208.4K in comparison of the April’s -2.3617M. The Wholesale Sales for the month of April declined by 21.6% against the expected decline of 11.6% and weighed on the Canadian Dollar. The (NHPI) New Housing Price Index for May decreased to 0.1% from the expected 0.2% and weighed on the Canadian Dollar.
Mediocre than expected data from Canada exerted negative pressure on the Canadian Dollar, which in turn added strength to the USD/CAD pair’s gains. At 17:30 GMT, the Philly Fed Manufacturing Index for June was surged to 27.5 against the forecasted -23.0 and supported the US dollar. The Unemployment Claims from the US surged to 1.508M from 1.3M forecast and weighed on the US dollar. At 19:00 GMT, the CB Leading Index surged to 2.8% from 2.4% expected and supported the US dollar.
US dollar failed to give USD/CAD pair any specific movement as it was provided with mixed data.
On the crude oil front, the WTI Crude oil prices on Thursday surged to 38.93 $ per barrel on the back of production cut by OPEC+. This gave strength to the Canadian Dollar, which is also considered as the commodity-linked currency-Loonie. Loonie’s strength, however, kept a lid on additional gains in the USD/CAD pair.
Furthermore, the Deputy Governor of Bank of Canada, Lawrence Schembri, delivered a speech on Thursday that said that two phases were on board, the reopening phase, and the recuperation phase. The first one will be rapid; however, the second will be prolonged and uneven.
According to Schembri, that households will remain cautious about spending until a vaccine development was not in process. He added that fiscal measures were continuously supporting income losses and household spending.
He said that any more persistence in the job loss could slow the economic recovery because longer income losses mean a higher risk of possible insolvencies. The situations for energy-producing regions were particularly notable as they were already under financial crisis due to decreased demand. In the end, Schembri said that less immigration might cause slower recovery. These dovish comments from Deputy Governor of BoC weighed on CAD, which helped USD/CAD pair up the pace.
Daily Technical Levels
Pivot Point: 1.3557
On Friday, the USD/CAD pair continues trading sideways within a descending triangle pattern, maintaining the narrow trading range of 1.3665 - 1.35100. The traders seem to wait for the ADP NFP figures from Canada, while a stronger than expected data can drive a bearish breakout below 1.3523 level and lead Loonie towards 1.3450 and 1.3357 area. Alternatively, the weaker data can lead the pair towards 1.3660 level today. Good luck!