Investing.com - The U.S. dollar rallied to a two-week high against its Canadian counterpart on Friday, after official data showed that hiring in the U.S. declined for a third successive month in April, fuelling concerns over the outlook for the U.S. economic recovery.
USD/CAD hit 0.9803 on Monday, the weekly low; the pair subsequently consolidated at 0.9957 by close of trade on Friday, gaining 1.49% over the week.
The pair is likely to find support at 0.9860, Friday’s low and short-term resistance at 1.0010, the high of April 23.
The Department of Labor said the U.S. economy added 115,000 jobs in last month, far short of expectations for a 170,000 increase, after adding an upwardly revised 154,000 jobs in March.
The unemployment rate ticked lower to 8.1% but the labor participation rate also declined, as fewer people sought jobs.
The weak data added to uncertainty over the strength of the U.S. recovery and fuelled speculation the Federal Reserve implement a third round of quantitative easing measures to stimulate growth.
Market sentiment was also hit by concerns over political uncertainty in the euro zone, in the run-up to weekend elections in Greece and France, amid fears leadership changes could hinder attempts to resolve the regions debt crisis.
The Canadian dollar also came under pressure as crude oil, Canada’s largest export fell below USD100 a barrel for the first time since February, amid fears over a slowdown in demand from the U.S.
Crude futures for delivery in June settled at USD98.55 a barrel by close of trade on Friday, having tumbled 5.95% over the week.
The loonie, as the Canadian dollar is also known, came under pressure after official data showing an unexpected decline in Canadian economic growth in February dampened expectations for a rate hike by the Bank of Canada in the coming months.
Statistics Canada said Monday that gross domestic product contracted by a seasonally adjusted 0.2% in February, defying expectations for growth of 0.2%, led lower by temporary shutdowns in oil and mining production.
In the week ahead, investors will be closely watching election results in Greece and France, while in the U.S. a speech by Fed Chairman Ben Bernanke in Chicago on Thursday the main focus for the greenback.
In addition, China is to release a flurry of data, including reports on retail sales and inflation that will allow investors to gauge the strength of the world’s second largest economy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 7
Canada is to produce official data on building permits, an excellent gauge of future construction.
Tuesday, May 8
Canada is to publish industry data on housing starts, a key gauge of economic health.
Wednesday, May 9
The U.S. is to produce government data on crude oil stockpiles; this data can be a big market mover for the loonie, due to the size of Canada’s energy sector. The U.S. is also to hold a 10-year government bond auction.
Thursday, May 10
Canada is to release official data on the trade balance, the difference in value between imports and exports.
The U.S. is to produce official data on the trade balance, as well as government data on unemployment claims and import prices.
Additionally, the U.S. is to release government data on the federal budget balance and the Treasury currency report, while Federal Reserve Chairman Ben Bernanke is due to speak. His comments will be closely watched for any clues to the future possible direction of monetary policy.
Friday, May 11
Canada is to release an official report on employment change and the unemployment rate.
The U.S. is to round up the week with government data on producer price inflation, a key gauge of consumer inflation, followed by a preliminary report by the University of Michigan on consumer sentiment, a leading indicator of consumer spending.
USD/CAD hit 0.9803 on Monday, the weekly low; the pair subsequently consolidated at 0.9957 by close of trade on Friday, gaining 1.49% over the week.
The pair is likely to find support at 0.9860, Friday’s low and short-term resistance at 1.0010, the high of April 23.
The Department of Labor said the U.S. economy added 115,000 jobs in last month, far short of expectations for a 170,000 increase, after adding an upwardly revised 154,000 jobs in March.
The unemployment rate ticked lower to 8.1% but the labor participation rate also declined, as fewer people sought jobs.
The weak data added to uncertainty over the strength of the U.S. recovery and fuelled speculation the Federal Reserve implement a third round of quantitative easing measures to stimulate growth.
Market sentiment was also hit by concerns over political uncertainty in the euro zone, in the run-up to weekend elections in Greece and France, amid fears leadership changes could hinder attempts to resolve the regions debt crisis.
The Canadian dollar also came under pressure as crude oil, Canada’s largest export fell below USD100 a barrel for the first time since February, amid fears over a slowdown in demand from the U.S.
Crude futures for delivery in June settled at USD98.55 a barrel by close of trade on Friday, having tumbled 5.95% over the week.
The loonie, as the Canadian dollar is also known, came under pressure after official data showing an unexpected decline in Canadian economic growth in February dampened expectations for a rate hike by the Bank of Canada in the coming months.
Statistics Canada said Monday that gross domestic product contracted by a seasonally adjusted 0.2% in February, defying expectations for growth of 0.2%, led lower by temporary shutdowns in oil and mining production.
In the week ahead, investors will be closely watching election results in Greece and France, while in the U.S. a speech by Fed Chairman Ben Bernanke in Chicago on Thursday the main focus for the greenback.
In addition, China is to release a flurry of data, including reports on retail sales and inflation that will allow investors to gauge the strength of the world’s second largest economy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 7
Canada is to produce official data on building permits, an excellent gauge of future construction.
Tuesday, May 8
Canada is to publish industry data on housing starts, a key gauge of economic health.
Wednesday, May 9
The U.S. is to produce government data on crude oil stockpiles; this data can be a big market mover for the loonie, due to the size of Canada’s energy sector. The U.S. is also to hold a 10-year government bond auction.
Thursday, May 10
Canada is to release official data on the trade balance, the difference in value between imports and exports.
The U.S. is to produce official data on the trade balance, as well as government data on unemployment claims and import prices.
Additionally, the U.S. is to release government data on the federal budget balance and the Treasury currency report, while Federal Reserve Chairman Ben Bernanke is due to speak. His comments will be closely watched for any clues to the future possible direction of monetary policy.
Friday, May 11
Canada is to release an official report on employment change and the unemployment rate.
The U.S. is to round up the week with government data on producer price inflation, a key gauge of consumer inflation, followed by a preliminary report by the University of Michigan on consumer sentiment, a leading indicator of consumer spending.