Canadian Dollar Jumps on Weak US Jobs Data – April 3, 2015
The Canadian dollar jumped after the US reported weaker job growth than expected. With the US reporting the weakest job gains in about a year and well under expectations, US interest rate hike expectations are likely to be pushed back.
Some signs of weakness in the US economy are starting to emerge along with the threat of a strong US dollar hurting the export sector. This could be enough for the FED to kick the can forward and delay an interest rate until the latter part of the year.
The Canadian dollar has been hurt by rising expectations of a US interest hike, especially while in Canada, interest rates are expected to stay neutral to possibly fall if oil prices get weaker. The interest rate differential is a big catalyst in the movement of the Canadian dollar. Today’s data, narrows the interest rate differential in the near term as weak US data limits an interest rate hike possibility in the near term.
The overall catalysts for the Canadian dollar remain oil prices in Canada and economic divergence between Canada and the US. It seems like the US economy will need some more solid economic data points before US dollar bulls get their momentum again. Look for the USD/CAD to test 1.2400 and then be rangebound until further data releases help dictate the direction of the US economy.
By Admin | April 3, 2015 | Daily Update |
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