Market participants may be wary of the Canadian dollar’s direction as the unemployment rate worsened from 5.2% to 5.4%

Market participants may be wary of the Canadian dollar’s direction as the unemployment rate worsened from 5.2% to 5.4%

10.07.2023

Last weekend, the Canadian dollar fell against the yen following the release of Canada’s June employment report on the 7th. Although the number of employed persons rose from the market forecast of 19,000 to 60,000, the unemployment rate worsened from the market forecast of 5.3% to 5.4%. The CAD/JPY pair fell by just over 90 pips, from 107.835 to 106.878.The pair fell without finding support at the 20-day moving average on the daily chart. With the BOC policy rate announcement coming up the day after tomorrow, we should remain cautious regarding the possibility of a continued decline in the Canadian dollar.

Despite the fact that German industrial production, released last weekend, fell to 0.7% year-on-year from 1.6% the previous month, the euro rose against the U.S. dollar. The EUR/USD pair rose by approximately 100 pips from 1.0867 to 1.0973, gaining momentum as it approached last month’s high of 1.1010.From a technical perspective, the EUR/USD pair is trending upward toward the 1.1160 level, which marks the upper boundary of the daily rising wedge pattern, so we will be watching price movements closely during European trading hours.

Today’s schedule includes: Turkey’s employment statistics at 4:00 PM, the Eurozone investor sentiment index at 5:30 PM, Canada’s housing starts at 9:30 PM, Israel’s policy rate at 10:00 PM, U.S. wholesale inventories and remarks by Fed Vice Chair Bar at 11:00 PM, remarks by BOE Governor Bailey at 12:00 AM, and U.S. Daily:Remarks by the President of the San Francisco Fed, Remarks by Mester, President of the Cleveland Fed, at 1:00 AM: Remarks by Nagel, President of the German Bundesbank, Remarks by Bostic, President of the Atlanta Fed, and at 4:00 AM: U.S. consumer credit data. We should remain cautious regarding the direction of the Canadian dollar, as the unemployment rate has worsened from 5.2% to 5.4%.