USD/CAD drops below 1.2400 as USD weakens after NFP report
- USD/CAD broke below 1.2400 in early American session.
- US Dollar Index dropped below 92.50 after NFP report.
- Rising crude oil prices help CAD outperform its rivals.
After spending the first half of the day moving sideways in a tight range above 1.2400, the USD/CAD pair came under renewed bearish pressure and dropped to a session low of 1.2375. As of writing, the pair was down 0.42% on a daily basis at 1.2382.
DXY loses traction despite strong NFP print
The renewed USD weakness seems to be allowing USD/CAD to push lower in the early American session. Although the data published by the US Bureau of Labor Statistics revealed that Nonfarm Payrolls (NFP) in the US increased by 850,000, the greenback struggled to continue to outperform its rivals. Following a spike to a fresh multi-month high of 92.74 in the immediate reaction, the US Dollar Index (DXY) reversed its direction and was last seen losing 0.15% on the day at 92.40.
Despite the strong increase in the NFP, the Labor Force Participation Rate remained unchanged at 61.6% in June and the Unemployment Rate edged higher to 5.9% from 5.8%.
On the other hand, Statistics Canada reported that Canada posted a trade deficit of C$1.4 billion in June.
Meanwhile, the barrel of West Texas Intermediate is posting modest daily gains around $75, helping the CAD preserve its strength for the time being.
Technical levels to watch for