During Monday's early European session, the USD/CAD fluctuates downward, approaching 1.3780.
Fed rate drop bets are fueled by disappointing US job data, which weakens the US dollar.
Reduced prices for crude oil might stop the pair's decline and push the commodity-linked Loonie lower.
Monday's early European trading hours see the USD/CAD pair trading on a weaker note at 1.3780. The weaker-than-expected US July job report causes the greenback to veer lower against the Canadian dollar (CAD). The US ISM Services Purchasing Managers Index (PMI), which is released later Tuesday, will provide additional guidance to investors.
According to the US Bureau of Labor Statistics (BLS) on Friday, the US Nonfarm Payrolls (NFP) increased by 73,000 in July, compared to a 14,000 increase (revised from 147,000) in June. This reading was lower than the 110,000 estimates. As anticipated, the US unemployment rate increased from 4.1% in June to 4.2% in July. Additionally, the US ISM Manufacturing PMI performed worse than anticipated, falling from 49.0 in June to 48.0 in July.
Following the negative US economic statistics that put pressure on the US dollar (USD), dealers of Fed funds futures increased their bets on rate reduction once more on Friday. With more than 63 basis points (bps) more rate cuts anticipated by December, markets are now pricing in a nearly 95% chance that the US Federal Reserve (Fed) will lower rates in September following the weaker-than-expected jobs statistics.
However, as worries about possible supply disruptions connected to Russia grow, the Organization of Petroleum Exporting Countries and allies (OPEC+) announced plans to increase oil production by 547K barrels per day (bps) for September, which caused crude oil prices to plummet. This could therefore have an impact on the commodity-linked Loonie. It is important to remember that Canada is the biggest supplier of oil to the US, and the value of the Canadian dollar typically suffers when crude oil prices decline.
Fed rate drop bets are fueled by disappointing US job data, which weakens the US dollar.
Reduced prices for crude oil might stop the pair's decline and push the commodity-linked Loonie lower.
Monday's early European trading hours see the USD/CAD pair trading on a weaker note at 1.3780. The weaker-than-expected US July job report causes the greenback to veer lower against the Canadian dollar (CAD). The US ISM Services Purchasing Managers Index (PMI), which is released later Tuesday, will provide additional guidance to investors.
According to the US Bureau of Labor Statistics (BLS) on Friday, the US Nonfarm Payrolls (NFP) increased by 73,000 in July, compared to a 14,000 increase (revised from 147,000) in June. This reading was lower than the 110,000 estimates. As anticipated, the US unemployment rate increased from 4.1% in June to 4.2% in July. Additionally, the US ISM Manufacturing PMI performed worse than anticipated, falling from 49.0 in June to 48.0 in July.
Following the negative US economic statistics that put pressure on the US dollar (USD), dealers of Fed funds futures increased their bets on rate reduction once more on Friday. With more than 63 basis points (bps) more rate cuts anticipated by December, markets are now pricing in a nearly 95% chance that the US Federal Reserve (Fed) will lower rates in September following the weaker-than-expected jobs statistics.
However, as worries about possible supply disruptions connected to Russia grow, the Organization of Petroleum Exporting Countries and allies (OPEC+) announced plans to increase oil production by 547K barrels per day (bps) for September, which caused crude oil prices to plummet. This could therefore have an impact on the commodity-linked Loonie. It is important to remember that Canada is the biggest supplier of oil to the US, and the value of the Canadian dollar typically suffers when crude oil prices decline.
