USD/CAD approaches 1.3300 as US Dollar strengthens in a data-packed week
- USD/CAD climbs to near 1.3270 as investors’ risk-appetite is fading away.
- The USD jumps to weekly high near 102.00 ahead of US Manufacturing PMI and the FOMC minutes.
- The Canadian Dollar will be guided by the employment data.
The USD/CAD pair prints a fresh weekly high to near 1.3270 in the late European session. The Loonie asset delivers a decisive breakout of the consolidation formed in a range of 1.3180-1.3260, propelled by strength in the US Dollar.
S&P500 futures generated significant losses in the European session, portraying a sharp decline in the risk-appetite of the market participants. The 10-year US Treasury yields climb to near 3.96%.
The US Dollar Index (DXY) jumps to near 102.00 as profit-booking kicks-in due to stretched valuations in the risk-perceived assets in a short-term period. However, the broader appeal for the USD Index is still downbeat as prospects of early rate cuts by the Federal Reserve (Fed) are significantly high.
Going forward, investors will focus on the Institute of Supply Management (ISM) Manufacturing PMI and the Federal Open Market Committee (FOMC) minutes, which will be published on Wednesday.
As per the consensus, the ISM Manufacturing PMI data for December improved to 47.1 against the former reading of 46.7 but remained below the 50.0 threshold. The factory data is set to remain in the contraction phase for 14th month in a row.
On the Canadian Dollar, investors await the labour market data for December, which will be published on Friday. The Unemployment Rate is seen higher at 5.9% vs. the former reading 5.8%. Investors expect that Canadian employers hired 12K fresh workers against 24.9K addition in November.