USD/CAD Daily Fundamental Analysis for July 08, 2011

Forex Mansion   |  July 7 2011 4:55 EDT

By ForexMansion.com

The USD/CAD pair fell strongly on Thursday as investors bought higher yielding assets after the stronger than expected rise in ADP employment change, where the ADP employment change showed U.S. private employers added 157,000 jobs in June more than double expectations, which spread optimism among traders ahead of Friday’s Non-farm payrolls.

Rising confidence in markets led investors to target higher yielding assets including crude oil, which supported the CAD to gain against the USD, and accordingly, pushed the USD/CAD pair lower, where investors feel optimistic over the outlook for growth in the United States, Canada’s largest trading partner.

Investors will be eyeing key data from the labor markets of both Canada, and the United States, where the Canadian jobs report is expected to show that employers added 15.0 thousand jobs in June, while the U.S. Non-farm payrolls are expected to show U.S. employers added 105,000 jobs in June, and if the Non-farm payrolls show similar strength to that shown in the ADP, we should expect the pair to extend its drop on Friday.

Friday July 08:

Canada’s jobs report will be released at 11:00 GMT, where the unemployment rate is expected to remain unchanged at 7.4% in June, while the net change in employment is expected to show a rise by 15.0 thousand jobs, compared with the prior rise of 22.3 thousand jobs in May.

At 12:30 the jobs report will be the focus for the current state of the labor market. The Nonfarm payrolls are expected at 105,000 following 54,000 and unemployment to hold at 9.1%.

Private payrolls are expected to rise to 125 thousand following 83,000 and manufacturing payrolls to maintain the weakness and rise by 5,000 jobs only.

At 14:00 the wholesale inventories is due for May and expected at 0.6% following 0.8% and at 19:00 GMT consumer credit also for May is expected to slow to $4.0 billion from $6.247 billion.

Originally posted here