USD/CAD stays quiet below 1.2700 ahead of key US and Canada jobs reports
- USD/CAD is trading in a tight range below 1.2700 on Friday.
- US Dollar Index is posting small daily gains, stays below 90.00.
- Investors await labour market data from the US and Canada.
Despite the broad-based USD strength, the USD/CAD pair struggled to gather bullish momentum and closed virtually unchanged at 1.2687 on Thursday. With investors stepping to the sidelines ahead of key macroeconomic data releases, the pair moves sideways in a narrow band on Friday and was last seen losing 0.06% at 1.2681.
The surging US Treasury bond yields continued to provide a boost to the greenback and the US Dollar Index advanced to its highest level in a week at 90.13 on Friday before returning to 89.90 area. However, the crude oil rally that kicked off on Tuesday allowed the commodity-related loonie to stay resilient against its rivals.
Supported by Saudi Arabia's decision to voluntarily lower its oil output, the barrel of West Texas Intermediate touched its best level since late February at $51.31 on Friday. At the moment, the WTI is up 0.3% at $51.05.
Focus shifts to jobs data
Later in the session, the Nonfarm Payrolls (NFP) report from the US and the Net Change in Employment data from Canada will be watched closely by the market participants.
Previewing the NFP data, "market’s expectations are aligned with leading indicators, which anticipate a soft job’s creation in December," said FXStreet Chief Analyst Valeria Bednarik. "The country added just 245K new positions in November, with the main figure on a downtrend ever since topping at 4.78 million in June."
Nonfarm Payrolls Preview: Long path to recovery to be even longer
A disappointing NFP reading could weigh on US stocks and help the USD gather strength. On the other hand, the CAD is also likely to capitalize on upbeat labour market data.
Technical levels to watch for