Key Moments
- USD/CAD trades around 1.3630, showing virtually no movement on Thursday.
- Expectations for a potential US-Iran deal pressure Crude Oil prices and weigh on the Canadian Dollar.
- Traders monitor upcoming US labor data, including Initial Jobless Claims and Nonfarm Payrolls.
Rangebound Trading in USD/CAD
USD/CAD is trading sideways near 1.3630 on Thursday at the time of writing, with the pair little changed on the day. Softer Oil prices continue to undermine the Canadian Dollar (CAD), while the US Dollar (USD) is also under pressure, keeping the cross confined to a tight range.
US-Iran Deal Hopes Weigh on Oil and the Canadian Dollar
Risk sentiment has improved following comments from US President Donald Trump, who said he had “very good talks” with Iran and that a deal remained “very possible”. At the same time, Iranian Foreign Ministry spokesman Esmaeil Baghaei stated that a US proposal aimed at ending the conflict was still “under review”.
According to several reports released on Thursday, Tehran is assessing a 14-point peace proposal from Washington, and intense discussions are reportedly taking place over the possible reopening of the Strait of Hormuz. This backdrop is supporting risk appetite and is exerting downward pressure on Crude Oil prices, which is negative for the commodity-linked Canadian Dollar.
West Texas Intermediate (WTI) crude remains under pressure above $90 per barrel, while Brent is trading below $100, limiting support for the Loonie.
Focus Shifts to US Labor Market Data
On the US side, attention is turning to incoming labor market indicators. The weekly Initial Jobless Claims report is scheduled for release later on Thursday, followed by Friday’s Nonfarm Payrolls (NFP) report. Economists expect 60,000 job additions in April, with the Unemployment Rate forecast to stay unchanged at 4.3%.
Boston Federal Reserve Bank President Susan Collins said on Thursday that the Federal Reserve (Fed) could keep interest rates unchanged “for a longer period”, while still viewing rate cuts as the baseline scenario “down the road”. Collins also noted that an alternative scenario could lead the central bank to consider a rate hike.
Despite these cautious remarks, the US Dollar remains broadly capped, with the US Dollar Index (DXY) trading slightly lower around 97.90 in an environment of improved risk sentiment.
Technical View on USD/CAD
Scotiabank analysts judge that the short-term technical outlook continues to favor Canadian Dollar strength against the Greenback. They indicate that USD/CAD would need to reclaim the 1.3720 area on a sustained basis to signal meaningful bullish momentum in the US Dollar, and that rebounds in the pair are still being treated as opportunities to sell.
US Dollar Performance Against Major Currencies
The following table shows the percentage change of the US Dollar (USD) versus major currencies today. According to the data, the US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | -0.15% | 0.02% | -0.04% | -0.27% | -0.41% | -0.08% | |
| EUR | 0.15% | -0.01% | 0.17% | 0.12% | -0.13% | -0.27% | 0.07% | |
| GBP | 0.15% | 0.00% | 0.15% | 0.11% | -0.13% | -0.26% | 0.06% | |
| JPY | -0.02% | -0.17% | -0.15% | -0.08% | -0.30% | -0.48% | -0.10% | |
| CAD | 0.04% | -0.12% | -0.11% | 0.08% | -0.23% | -0.37% | -0.05% | |
| AUD | 0.27% | 0.13% | 0.13% | 0.30% | 0.23% | -0.14% | 0.20% | |
| NZD | 0.41% | 0.27% | 0.26% | 0.48% | 0.37% | 0.14% | 0.32% | |
| CHF | 0.08% | -0.07% | -0.06% | 0.10% | 0.05% | -0.20% | -0.32% |
The heat map shows percentage changes of major currencies against each other. The base currency is taken from the left column, while the quote currency is taken from the top row. For example, choosing the US Dollar from the left column and moving along the row to the Japanese Yen cell yields the percentage change for USD (base)/JPY (quote).
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