USD/CAD oscillates around 1.2840 ahead of employment data, oil struggles above $93.00
- USD/CAD is juggling around 1.2840 as investors await US and Canadian employment data.
- Subdued oil prices on weaker Caixin Manufacturing PMI weakened the Canadian dollar.
- The loonie region may show job additions by 20k against the lay-off of 43.2k jobs in June.
The USD/CAD pair has turned sideways after printing a two-day high of 1.2856 on Monday. In the first trading session of August, the asset displayed a responsive buying action after slipping below the cushion of 1.2790. A responsive buying action drove the asset swiftly higher and greenback bulls are aiming to recapture the weekly high of 1.2900 sooner.
The asset defended the downside break after oil prices plunged on Monday as weaker manufacturing activities triggered oil bears. A subdued performance by the Caixin Manufacturing PMI resulted in a steep fall in the oil prices. The economic data landed at 50.4, lower than the expectations of 51.5 and the prior release of 51.7. It is worth noting that China is the largest consumer of oil in the world and a plunge in Chinese manufacturing activities is sufficient to impact oil prices.
Also, Canada is the leading exporter of oil to the US and a meaningful drop in oil prices strengthened the greenback against the Canadian dollar.
This week, the employment data from the US and Canada is of utmost importance. The US Nonfarm Payrolls (NFP) is seen lower at 250k than the former print of 372k. This has resulted in a downside move in the US dollar index (DXY). The DXY printed a fresh-three-week low at 105.28 on Monday. Also, the US jobless rate is seen unchanged at 3.6%.
On the loonie front, the Net Change in Employment is seen at 20k, while the economy showed a jobless situation in June of 43.2k. The Unemployment Rate may increase to 5% from the prior release of 4.9%.