Amongst a lack of any Canadian fundamental economic releases on the day, USDCAD investors were mainly concentrating on US dollar and crude oil market flows.
The US dollar was broadly neutral against its G10 peers on Thursday, despite further strong US macro data. Initial weekly jobless claims and November challenger layoffs on Thursday were both better than expected after Wednesday’s strong November ISM Manufacturing PMI survey and ADP employment change estimate.
One reason why the dollar may have overlooked the strong data is because it mostly fits with the narrative of US economic/labor market strength being painted by the Fed. For another, it’s official US jobs report day on Friday (the November report), so it’s possibly not surprising to see Forex markets enter wait-and-see mode. A few Fed members spoke, though none added anything beyond Powell’s hawkish message from earlier in the week.
The Omicron variant and oil will remain key drivers on Friday, but maybe overshadowed somewhat by the dual release of both US and Canadian November jobs data at 1330GMT.
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