US dollar gained ground against its Canadian counterpart on Monday, as market players expected a positive series of economic indicators out of the United States during the current week would prompt Fed to embark on a pare back of its stimulus.
USD/CAD reached its highest point today at 1.0314 at 12:13 GMT, after which the pair consolidated at 1.0302, up by 0.13% for the day. Support was expected at August 9th low, 1.0273, while resistance was to be met at July 31st high, 1.0334.
The US dollar firmed its positions ahead of the retail sales report out of the United States on Tuesday, which may provide clues that economic recovery was on its way. The greenback was pressured last week, after the disappointing non-farm payrolls report on August 2nd, which stated US economy added fewer than anticipated job positions during July. This made market players reassess their expectations, regarding the timing of Fed’s bond purchase pare back.
Meanwhile, concerns over Canadian economic outlook appeared after the release of the employment report last Friday. It showed that economy eliminated 39 400 jobs in July, marking the second monthly decrease and the most considerable one since March this year. In June economy lost hardly 400 jobs, while preliminary estimates pointed that 10 000 new job positions will be added. Unemployment rate, in the mean time, rose to 7.2% in July from 7.1% in June, which defied experts estimates of an unchanged rate.
Elsewhere, the Canadian currency was trading higher against the euro, as EUR/CAD cross shed 0.32% to 1.3696 at 14:25 GMT. In addition, GBP/CAD pair also lost 0.14% for the day, trading at 1.5945 at 14:26 GMT.
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