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Nonfarmpayrolls

CAD powers higher, all eyes on NFPThe Canadian dollar has posted slight losses on Friday. In the North American session, USD/CAD is trading at 1.2176, up 0.22% on the day. The Canadian currency continues to head higher. On Thursday, the Canadian dollar sparkled, gaining 0.95%, its highest 1-day gain in 2021. USD/CAD fell 2.15% in April and is down 0.95% so far in May, as the Canadian dollar is trading at its highest level since September 2017. Canada has a commodity-based economy, and this week's rally in oil prices has lifted the Canadian dollar. As well, copper is trading at an all-time high, and Canada is one of the world's major copper producers. A stronger global demand for commodities bodes well for the Canadian dollar. All eyes will be on US nonfarm payrolls for April, which will be released on Friday (12:30 GMT). The ADP Employment Report is not considered a reliable gauge for the official NFP, but investors couldn't help notice that the ADP reading jumped to 742 thousand, up from 514 thousand. Nonfarm payrolls climbed to 916 thousand in March and with a forecast of 990 thousand, a reading above the symbolic one-million mark is certainly within reach. If nonfarm payrolls outperforms, it would be another signal that the US economy is well on the road to recovery. Canada will also release key employment numbers on Friday (12:30 GMT). However, unlike the US, the consensus is for a dismal release for April. The economy produced some 303 thousand new jobs in March, but investors are bracing for a sharp downturn in April, with a forecast of -160 thousand. The unemployment rate is expected to rise to 7.8%, up from the current 7.5%. If the readings fall within expectations, the Canadian dollar's party this week could come to an end. On the upside, there is resistance at 1.2435 and 1.2575. USD/CAD is testing support at 1.2210. Below, there is support at 1.2125
by OANDA
China tensions weigh on Aussie, NFP loomsThe Australian dollar is slightly higher in Thursday trade. In the North American session, AUD/USD is trading at 0.7756, up 0.12% on the day. On the fundamental front, the RBA releases its quarterly policy statement on Friday (1:00 GMT). Relations between China and Australia continue to spiral downwards. China has engaged in a trade war against Australia, which included tariffs on Australian wine exports in November. Last month, the Australian government made the unusual move of cancelling an infrastructure agreement between China and the State of Victoria, which was connected to China's Belt and Road initiative. Predictably, the move was harshly criticised by the Chinese government. The latest salvo was fired earlier on Thursday, as China said it was indefinitely suspending the China-Australia Strategic Economic Dialogue. The dialogue has been frozen since 2017, so the move appears to be largely symbolic. The huge trading relationship between the countries will likely not be affected, such as Australian exports of iron ore to China. Still, the announcement of the suspension of the dialogue was enough to send the Australian dollar briefly lower. If there are further negative political developments between the two countries, the Aussie could face a bumpy road. All eyes will be on US nonfarm payrolls for April, which will be released on Friday (12:30 GMT). The ADP Employment Report is not considered a reliable gauge for the official NFP, but investors couldn't help notice that the ADP reading jumped to 742 thousand, up from 514 thousand. Nonfarm payrolls climbed to 916 thousand in March and with a forecast of 990 thousand, a reading above the symbolic one-million mark is certainly within reach. If nonfarm payrolls outperforms, risk sentiment would improve, which would be bearish for risk commodities like the Australian dollar.
by OANDA