USD/CAD hovers around 1.3630 during the Asian session on Monday, attempting to snap the previous session’s losses. The pair experienced downward press
As said, Average Hourly Wages improved to 5.2% from the previous reading of 5.0%. Net Change in Employment printed a reading of 39.9K, significantly higher than the market consensus of 15.0K, swinging from the previous -6.4K. While the Unemployment Rate remained consistent at 5.5% against the expectations of a 5.6% reading.
However, strong wage growth has the potential to boost consumer spending and maintain persistent inflationary pressures. This situation might lead the Bank of Canada to consider raising interest rates once more., which measures the performance of the Greenback against six other major currencies, is presently trading around 104.80 slightly below its peak since April. However, US Treasury yields have improved, which could exert pressure on the price of the yellow metal.
Additionally, Chicago Fed Bank President Austan Goolsbee has articulated the central bank's objective of steering the economy onto a "golden path." This path signifies a scenario in which inflation subsides without causing a recession, a delicate balance that central banks often strive to achieve to maintain economic stability and growth.
Moreover, investors are seeking further cues on the US Federal Reserve’s decision on maintaining higher interest rates for an extended duration. Also, traders anticipate that thewill implement a 25 basis point interest rate hike by the conclusion of the year 2023. This hawkish stance from the central bank could potentially contribute to the support in underpinning the Greenback.
Given the lack of significant economic data releases from Canada, investors are likely to turn their attention to the United States