The USDAD currency pair was trading down for the second consecutive session as the Canadian dollar rallied against its US peer despite the release of upbeat US nonfarm payroll data during the American session. The upbeat US jobs data coincided with the upbeat Canadian jobs data.
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The US added 253,000 non-farm jobs in April, beating analysts' expectations of 181,000 jobs, showing that the US jobs market remained robust as the demand for workers remained high. The country’s unemployment rate also fell to 3.4%, missing analysts estimates of 3.6%, while marking a slight decline from last month’s 3.5% figure.Â
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Canada also released its labour market report, showing that it added 41,400 jobs, beating analysts' consensus estimates of 21,600 jobs. According to Statistics Canada, the country’s unemployment rate remained stable at 5.0% versus analysts' estimates of a slight increase to 5.1%.
The US average hourly earnings also rose to 0.5% from the previous figure of 0.3%, beating analysts' expectations that the earnings increase would remain stable at 0.3%. The US dollar’s performance today caps a week of poor performance for the US dollar following the FOMC rate decision on Wednesday.
Investors are still concerned about the US dollar’s future performance given the risks that still permeate the US banking system, as evidenced by the collapse of First Republic Bank last weekend, which led to it being sold to JP Morgan Chase.
Despite the FOMC rate hike indicating that the Fed has confidence in the US financial system, cracks are emerging that show there is still a lot of risk in the markets due to the high interest rate environment created by the Federal Reserve Bank’s rate hikes.
The Canadian dollar’s strength can be attributed to other factors, given that global crude oil prices were falling up to yesterday. The West Texas Intermediate (WTI) was up almost $2.50 today and could have contributed to the loonie’s rally.
The US dollar will likely end slightly higher than last week, as tracked by the US Dollar Index (DXY).
*This is not investment advice.
The USDCAD price chart.
The USDCAD currency pair was trading down 58.7 pips (0.43%) as the Canadian dollar rallied against its US peer.
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