USD/CAD steadies below 1.2100 following NFP-inspired drop

FX
  • USD/CAD fell sharply in the early American session.
  • Nonfarm Payrolls in US rose less than forecast in May.
  • Employment in Canada declined by 68,000, Unemployment Rate rose to 8.2%.

The USD/CAD pair rose to its highest level in a week at 1.2134 on Friday but turned south in the second half of the day. After dropping to a daily low of 1.2070, the pair seems to have gone into a consolidation phase and was last seen losing 0.15 on the day at 1.2083. For the week, the pair remains on track to close little changed.

Renewed USD weakness drags USD/CAD lower

Earlier in the day, the uninspiring May jobs report from the US caused the greenback to come under heavy selling pressure. The US Bureau of Labor Statistics reported Nonfarm Payrolls increased by 559,000, missing the market expectation of 650,000. Underlying details of the publication showed the Labor Force Participation edged lower to 61.6% from 61.7 in April.

With these figures suggesting that the Fed won’t rush to start tapering discussions, the US Dollar Index erased a large portion of Thursday’s gains and is currently losing 0.37% at 90.15. Moreover, the 10-year US Treasury bond yield is down nearly 4%.

On the other hand, Statistics Canada announced that Employment in Canada fell by 68,000 in May, compared to analysts’ estimate of 20,000, and limited CAD’s gains. Additionally, the Unemployment Rate ticked up to 8.2% from 8.1%.

Technical levels to watch for

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