USDCAD on Friday rose 0.52% to 1.35700. Week ending 2024-09-06 rose 0.46%. What happened.

USDCAD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.52%	69.9 Pips
Week 2024-09-06	0.46%	62 Pips
September	0.6%	80.9 Pips

Upcoming key events for the new week (London Time)

Wed 02:00 AM Second 2024 United States presidential debate
Wed 01:30 PM CPI Inflation Rate (12-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM PPI excluding Food and Energy sectors (12-mth)
Fri 03:00 PM The Index of Consumer Sentiment

What happened over the week

In the United States, several key economic indicators have shown varied movement. Nonfarm Payroll Employment for August rose to 142,000 from a revised 89,000 in July, according to the Bureau of Labor Statistics. This increase illustrates some improvement in job creation but is still relatively moderate. Nonfarm Business Labor Productivity saw a slight rise in Q2 to 2.5% from 2.3% in Q1. Initial Unemployment Insurance Claims for the week ending 31 August also showed a minor decline, coming in at 227,000 from 231,000 in the previous week, as reported by the Department of Labor. U.S. Factory Orders rebounded remarkably, increasing by 5% in July compared to a 3.3% decline in June, based on figures from the Census Bureau. Conversely, the Job Openings and Labor Turnover Survey (JOLTS) data for July revealed a drop to 7.673 million open positions, down from a revised 7.91 million in June.

In Canada, the latest economic data suggest a slightly dimmer outlook. The Bank of Canada has reduced the policy interest rate to 4.25% from the previous 4.5%. Additionally, average hourly wages over a 12-month period in August fell to 4.9% from 5.2% in July, according to Statistics Canada. These decreases suggest potential concerns over economic growth and wage inflation.

The impact of these reports on the USDCAD pair has been noticeable. USDCAD rose by 0.52% to 1.35700 on Friday, marking a weekly increase of 0.46% for the week ending 2024-09-06. This rise in USDCAD can be largely attributed to stronger economic data from the U.S. compared to the softer outlook in Canada. Higher nonfarm payrolls, reduced initial unemployment claims, and robust factory orders point to a strengthening U.S. economy, potentially leading to a more hawkish Federal Reserve stance. Meanwhile, weaker wage growth and a rate cut from the Bank of Canada reflect a softer Canadian economic condition, adding downward pressure on the Canadian Dollar. Upcoming high-impact events such as the U.S. CPI Inflation Rate and the second U.S. presidential debate will likely introduce further volatility to the USDCAD currency pair.

From X (Twitter)

Employment was little changed in August 2024 (+22,000; +0.1%) while the employment rate decreased 0.1 percentage points to 60.8%.

The unemployment rate rose 0.2 percentage points to 6.6%.

For more info: https://t.co/fKNyw1WQ9d. pic.twitter.com/ze4FaTjCB8

— Statistics Canada (@StatCan_eng) September 6, 2024

What can we expect from USDCAD for the new week and what happened on Friday?

USDCAD on Friday rose 0.52% to 1.36. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2024-09-06, the pair rose 0.46% or 62 pips higher.

Looking ahead, USDCAD looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.36 or at least consolidates above Weekly Pivot level of 1.35. On the downside, we are looking at week low 1.34 or 1.35 (WS1) as immediate support level. USDCAD need to break on either side to indicate a short-term bias. A break above 1.36 would suggest bullish bias after recent positive movement.

For the month of September, USDCAD is up by 0.6% or 80.9 pips higher.

Weekly key levels to watch out:

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Labour Force Survey, August 2024 Source: Statistics Canada
Manufacturers’ Shipments, Inventories, and Orders Source: Census Bureau
U.S. International Trade in Goods and Services, July 2024 Source: Bureau of Economic Analysis
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U.S. International Trade in Goods and Services Source: Census Bureau
Construction Spending Source: Census Bureau