July 02, 2021
USD/CAD: Canadian dollar showed a bearish dynamic against the US dollar yesterday because new coronavirus outbreaks around the world pressured commodity-linked currencies and investors waited for the key economic data to be released today. According to a poll of economists, today’s closely watched US Labor Department report is expected to show that nonfarm payrolls increased by 700.000 in June. The final report is going to be published today at 12:30 GMT as well as the unemployment rate, which was forecasted to come out better than the previous one. However, supported by the reports suggesting that OPEC will debate an extension of output cuts until the end of 2022, the barrel of West Texas Intermediate reached its highest level since October 2018 at $76.20, which could affect CAD prices that are pretty sensitive to oil quotes.
USD/JPY: The dollar gained against the Japanese yen yesterday, having refreshed the 15-months high what appears to be a final push into the Nonfarm Payrolls data. The US dollar has shown another momentum ahead of a report that is likely to provide some clues if the Federal Reserve starts reducing monetary stimulus sooner. The catalyst has been in the Federal Open Market Committee’s unexpected hawkish shift at its last meeting, forecasting prospects of two interest rate hikes by the end of 2023. Meanwhile, the JPY has underperformed most currencies, affected by a dovish position of the Bank of Japan.
S&P500: Wall Street’s main indexes opened modestly higher yesterday. S&P500 Index traded at a new record high, rising 0.17%. If the market shows a positive dynamic today, it will be the 7th consecutive day of growth. Earlier in the day, the data published by the US Department of Labor showed that the weekly Initial Jobless Claims fell to the lowest level since March 2020 and this reading helped market sentiment improve. Among the 11 major S&P sectors, the Energy Index is up 1.75% supported by a huge gain in US crude oil prices. These catalysts altogether contributed to the market’s optimism. That’s why we recommend holding your long positions and taking new ones as soon as the price falls to the 4285 support level.