A pair of USD / CAD is moderately growing during the trading session of Thursday. From the opening of the day, the American dollar adds 0.17% against Canadian competitor and is quoted at 1,2803.
Support for US dollar has a strong macroeconomic data on business activity in the ISM service sector, as well as employment in the private sector from ADP, who returned to the market of hope for a faster restoration of the American economy. The index of supply managers (PMI) for the scope of services in January rose to 58.7 versus 57.7 in December increased by the Institute of Supplies (ISM). The Wall Street Journal surveyed economists expected the index value 57. At the same time, the ADP report reported on the growth of new jobs at 174 thousand in January after a decline in 78 thousand in the previous month. Analysts predicted the appearance of positive dynamics, but calculated only by 49 thousand.
Strong data on the private sector suggest that the Friday report on the US labor market will also exceed the expectations of traders, which cannot be said about the Canadian report on the state of the labor market, which will be released simultaneously with American. Analysts predict the growth of unemployment in Canada to 8.9%, as well as the reduction of the number of employed by almost 50 thousand in the event that the statistics really disappoint, the Bank of Canada can consider the possibility of additional incentive of the national economy through another reduction in the rate or increase the quantitative mitigation program . With this scenario, the pressure on CAD will increase at times.
Investors also follow the negotiations of American lawmakers about the new round of fiscal incentives in the United States. The Joe Bayden administration encourages to take a package of measures with a budget of $ 1.9 trillion., However, the oncoming proposal of the Republicans, nominated this week, implies a reduction in these expenses more than twice. It is expected that in the coming days, democrats can attempt to give their program the force of the law bypassing Republicans. While this did not happen the growth of the dollar may continue.
USD / CAD BUYLIMIT 1,2760 TP 1.29 SL 1,2710
Artem Deev, Head of Analytical Department Amarkets
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