As the dollar rises, USD/CAD reaches new daily highs close to 1.3600

Due to a higher US Dollar on Thursday, the USD/CAD is up by more than 100 pips. In the American session, the pair reached its high point at 1.3587. With a strong bullish tone, it is still close to the high.

The Loonie is doing better on Thursday even if it is depreciating against the Dollar. While NZD/CAD fell to its lowest level since late November due to a worsening in market sentiment, AUD/CAD is at two-day lows. The Nasdaq is down 1.28% while the Dow Jones is dropped by 1.20%. Prices for crude oil are rising but are still below highs.

Resistance for the USD/CAD could be seen between 1.3610/15 and then 1.3650. At 1.3700, a crucial level for the upswing is seen. A daily close that is higher would suggest continued strength. The pair has retraced from the important support level of 1.3470/80 on the downside; a daily close below this level should open the door to 1.3400.

Dollar is higher according to US data

ADP reported that the number of private payrolls increased by 235K in December, exceeding the 150K market consensus. Initial claims decreased to 204K, the lowest level since September, according to the weekly report on unemployment benefits. The S&P Global Services PMI reading for December was increased from 44.4 to 44.7.

The reports led to a rise in the US dollar. The DXT climbed above 105.00 to its highest point since December 8. The yields on US Treasury bonds increased as well, hitting multi-day highs across the curve. On Friday, the Nonfarm Payroll data is due. The market expects an increase of 200K. More volatility could be brought on by the numbers.

On Friday, a report on employment in Canada is also due. We anticipate an 8k increase in employment in December as the Canadian labor market begins to moderate. The unemployment rate should rise once more to 5.2% as a result, while full-time employment is anticipated to drive the headline figure given the labor shortage. We also expect wages to rise by 5.5% y/y with the support of muted base effects, and we anticipate a small increase in hours worked, according to TD Securities analysts.