Stronger US labor market reports boost expectations for prolonged Fed rate hikes, lifting the USD against the CAD.
The USD/CAD pair rose to 1.3905 in early European trading, supported by stronger-than-expected US jobs data. May ADP private payrolls and JOLTS job openings signaled a resilient labor market, fueling bets the Federal Reserve may keep rates higher for longer.
Markets now price a 42% chance of a December Fed rate hike, according to the CME FedWatch Tool. The move also follows a dip in crude oil prices after a ceasefire agreement between Israel and Lebanon, weakening the commodity-linked CAD.
Technical analysis shows USD/CAD holding above its 100-day SMA, with bullish momentum pressing toward the upper Bollinger band at 1.3910. Resistance is eyed at 1.3928 and 1.3966 if the pair closes above current levels.