USD/CAD Slides Near 1.3550 as Rising Crude Boosts Loonie Ahead of US Jobs Report
USD/CAD fell to about 1.3548 (near 1.3550) after a crude oil rally strengthened the Canadian dollar ahead of the US Non‑Farm Payrolls (NFP) release. WTI rose 2.1% to $84.72, extending a weekly gain of 4.3%, supported by Middle East tensions, OPEC+ production cuts of 2.2 million bpd, a 2.3 million‑barrel draw in US inventories and stronger Chinese manufacturing. Canada exports ~3.8 million barrels daily; higher oil typically boosts GDP and the loonie. Technicals: immediate resistance at the 50‑day MA (1.3580) and recent swing high (1.3620); support at 1.3520 (February low) and 200‑day MA (1.3470). The pair has a ~‑0.78 correlation with WTI over 30 sessions and has fallen ~1.8% for March so far. Markets await the March 2025 NFP (consensus ~210,000 jobs, unemployment 3.8%; avg. hourly earnings +0.3% m/m) — a stronger print could support the USD and delay Fed cuts, while weaker data would favor the loonie. Historical NFP days see average USD/CAD moves of ~0.8%. Interest‑rate divergence remains relevant: BoC paused with overnight rate at 4.25%, Fed funds at 4.50–4.75% with futures pricing ~68% chance of a June 2025 cut. Traders should expect elevated volatility at the NFP release and watch 1.3520/1.3580 for near‑term direction as oil dynamics, employment data and central‑bank signals interact.
Neutral
The immediate market driver is a crude oil rally that strengthens the commodity‑linked Canadian dollar, pushing USD/CAD toward 1.3550. However, the imminent US Non‑Farm Payrolls release is a pivotal macro catalyst that can quickly override commodity effects by altering Fed rate‑cut expectations. Historically, NFP days produce larger USD/CAD moves (~0.8%), so traders should expect increased volatility rather than a clear directional trend until the report is digested. In the short term, continued oil strength and positive Canadian fundamentals (trade surplus, inventory draws) favor the loonie, but a stronger‑than‑expected NFP print would likely reverse those moves by boosting the USD and delaying Fed easing (bearish for CAD). Over the medium term, sustained higher oil and stable BoC policy versus a Fed that delays cuts would keep pressure on USD/CAD lower; conversely, if oil retraces and US labor remains resilient, the USD could regain strength. This mix of commodity pressure and event‑driven policy risk supports a neutral classification — elevated trading opportunities but uncertain directional bias until the NFP outcome and subsequent Fed messaging clarify policy paths.