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
