Making the biggest gain in the season, the USD/CAD hit 1.0310 during early U.S. trade. The currency pair later on strengthened its position consolidating it at 1.0305 which is a gain of 0.28%. The gain is attributed to the bright employment scenario in the U.S. as traders are bullish that upbeat U.S. jobless data will influence the U.S. Federal Reserve to bring another stimulus program.
Forex experts estimate that the currency pair will get support at 1.0253 which was the lowest in July 29; however, investor may not buy it for more than 1.0364, the high of July 22. USD’s empowerment against all its major peers has been welcomed by the stakeholders as they consider it an indication of the improving US economy as with it the US Federal Reserve will slow down its pace of bond-buying.
The rate at which the U.S. Federal Reserve is buying bonds may lead to currency inflation which is an unwelcoming development for investors. Apart from the CAD, the USD also gained strength against the Aussie dollar wherein the latter’s prices dropped to 88.89 U.S. cents which is lower than what it was in August 2010.
Investors are waiting eagerly the data from the U.S. organization regarding nonfarm payrolls for indications of how the recovery in the U.S. labor market is progressing as it will have a lot of impact on the value of the USD. Like the USD, the euro is also under pressure as European Central Bank President Mario Draghi confessed that low interests will remain intact in the Euro zone for a long time.
Upbeat U.S. Jobless Data
The Bureau of Labor Statistics will release its July month report today i.e. 02nd July. However, the data for the month of June is positive wherein the bureau declared that total nonfarm payroll employment increased by 195,000 and the unemployment rate was unchanged at 7.6 percent.
Also, the organization reported that there has been a lot of hiring in sectors like leisure and hospitality, professional and business services, retail trade, healthcare, and financial activities. It also admitted that the number of individuals filing for initial jobless benefits has reduced.
The government body admitted that leisure and hospitality added 75,000 jobs in June which is a good prospect as the monthly job growth in the industry averages 55,000. The official release also indicated that hospitality is gaining the most when compared with the data from the last year which was 30,000 per month.
To contact the reporter of this story: Jonathan Millet at email@example.com