Americas TP news wrap: Canadian dollar jumps after a strong jobs report

Americas TP news wrap: Canadian dollar jumps after a strong jobs report
  • Saturday, 09/09/2023 | 02:04 GMT+5.5
  • Forex news for North American trading on Sep 8, 2023

Markets:

  • Gold flat at $1918
  • US 10-year yields flat at 4.26%
  • WTI crude oil down 48-cents to $87.35
  • S&P 500 up 0.2%
  • CAD leads, JPY lags

The euro remained relatively unchanged by the end of the day, despite notable developments. Preceding next week’s ECB meeting, some hawkish reports from within the ECB and substantial currency movements led to a sharp increase in the euro’s value, climbing from 1.0700 to 1.0740. However, this surge was later offset by a sell-off in Treasuries, and the euro’s gains were entirely reversed as the USD gradually regained strength after European trading hours.

Earlier in the day, the Chinese yuan depreciated to a 10-month low, possibly contributing to increased USD demand. The speculation here is that China might allow the yuan to weaken deliberately to stimulate its manufacturing sector, thus reducing one source of USD selling pressure.

The USD/JPY pair experienced a steady ascent throughout the day, reaching a session high of 147.86 as yields rose. This level closely aligned with the highs observed over the past two days, suggesting the emergence of resistance levels approaching 148.00.

The British pound, represented by Cable, attempted to breach the 1.2500 mark but faced swift resistance, ultimately closing 40 pips below this psychological figure.

The most significant headline of the day emanated from Canada, which surprised markets with positive job figures. The Canadian dollar (CAD), which had previously fallen to its lowest point since March, saw a strong resurgence, resulting in a 50-pip gain. Subsequently, as the USD strengthened broadly, some of these gains were trimmed, but the loonie managed to retain some of its advances.

The initial boost in CAD’s value had a ripple effect on the Australian dollar (AUD) and New Zealand dollar (NZD) in a thinly traded market. However, as trading shifted to New York, these gains reversed, and both AUD and NZD faced declines.

The Federal Reserve’s blackout period is set to begin at midnight, reducing one source of uncertainty for the upcoming week. However, the ECB’s impending decision looms large, and there is considerable uncertainty regarding its outcome, even among experts in Frankfurt.

Greg will be back late next week; have a great weekend.

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