USD/CAD refreshes four-month high near 1.3640 on solid US NFP, weak Canadian Employment – Crypto News – Crypto News
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USD/CAD refreshes four-month high near 1.3640 on solid US NFP, weak Canadian Employment – Crypto News

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  • USD/CAD rallies on strong US NFP, weak Canadian labor market data.
  • The speculation for Fed to begin rate cuts could be shifted to the second half of this year.
  • Canadian labors were fired over March. The jobless rate rose to 6.1%.

The USD/CAD pair prints a fresh four-month high at 1.3640 in Friday’s early American session. The Loonie asset rallies as the United States Bureau of Labor Statistics (BLS) has reported upbeat Nonfarm Payrolls and the Statistics Canada has showed poor Employment data for March.

The US NFP reported that the labor market witnessed 303K fresh payrolls, significantly better than expectations of 200K and the prior reading of 270K. The Unemployment Rate falls to 3.8% from the consensus and the prior reading of 3.9%. Strong labor demand has dented market expectations for the Federal Reserve (Fed) to begin reducing interest rates, which is currently expected from the June meeting.

Robust labor demand is generally followed by strong wage growth as employers are forced to offer higher pay due to shortage of workers. Higher wage growth boosts consumer spending, which keeps inflation stubbornly higher.

On Thursday, Minneapolis Fed Bank President Neel Kashkari said rate cuts won’t be required this year if inflation remains stall. Neel Kashkari forecasted two rate cuts by 2024 in the latest Fed’s dot plot.

Upbeat labor demand has boosted the US Dollar’s appeal. The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, extends its upside to 104.65.

Meanwhile, the Canadian Dollar weakens as workers were laid-off over month. Canada’s labor market witnessed drawdown of 2.2K workers, which investors forecasted fresh recruitment of 25K jobs. The Unemployment Rate rose strongly to 6.1% from expectations of 5.9% and the prior reading of 5.8%. However, annual Average Hourly Earnings grew at a higher pace of 5.0% from 4.9% in February.

Weak labor demand will boost expectations for the Bank of Canada (BoC) pivoting to rate cuts sooner.

 

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