Blowout US Jobs Data Shifts Rate Outlook, Lifts USD/CAD as Fed Hold Bets Surge

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3800-1.4050

Euro                1.5940-1.6190

Sterling           1.8300-1.8550

WTI Oil (opening level) $110.53

The CAD/USD is opening at 1.3921 ( 0.7183 )

The USD/CAD rose on Friday after an outstanding employment report in the US, which nearly tripled economists' projections, according to the US Bureau of Labor Statistics, but there was thin liquidity trading as most global markets were shut due to Good Friday.

Strong payrolls revive Fed hold bets as BoC tightening eyed

Nonfarm Payrolls in March rose by 178,000, exceeding forecasts of 60,000, up from February’s downwardly revised figures of -133,000. The Unemployment Rate fell two ticks to 4.3%, below the Federal Reserve’s 4.5% long-run target, which means the central bank's priority has returned to inflation.

The US Dollar Index, which measures the buck’s value against six currencies, is up around the 100.00 handle amid growing speculation that the Fed would not cut rates, as indicated by money markets.

Data by the Chicago Board of Trade revealed that investors trimmed dovish bets and predicted the Fed would hold rates throughout the year.

Bank of Canada held rates steady on March 18, and Governor Tiff Macklem commented that policymakers would look through the immediate inflationary impact of the Iran conflict but would act if price pressure proved persistent.

The swaps market had priced in two BoC rate hikes for the second half of the year.

USD/CAD price analysis: Technical outlook

The immediate reaction to the NFP saw the USD/CAD rise past the April 2 high of 1.3933, which could open the door to a challenge of 1.3950, with the next area of interest at 1.4000. On the downside, the 1.3900 figure would be the floor, amid low volumes on Friday.