USD/CAD fell sharply for a second day in a row on Thursday as a combination of factors helped to weigh on the US dollar while boosting the Canadian dollar. This USD/CAD drop has occurred immediately ahead of key Canadian jobs data for April to be released on Friday.
With the Federal Reserve decision and US monthly jobs report out of the way this past week, currency markets are looking next to two other key central banks that will be reporting their latest policy decisions in the week ahead – the Bank of England and the Reserve Bank of New Zealand.
Most aspects of the US jobs data released on Friday morning disappointed expectations, but were unlikely disappointing enough to sway the Federal Reserve from its firm track towards higher interest rates through 2018 and beyond.
This week could potentially be pivotal for AUD/USD, as the Reserve Bank of Australia and the US Federal Reserve will both be announcing key interest rate decisions – the RBA on Tuesday and the Fed on Wednesday.
For more than a week, the US dollar has risen sharply as US government bond yields have surged – with the benchmark 10-year Treasury yield briefly topping 3% – while geopolitical risk perceptions have tentatively waned.
The yen has weakened across the board in the past month, falling against both the euro and US dollar. The yen has fallen especially quickly against the sharply rebounding dollar, boosting USD/JPY well above key previous resistance around 108.00 this past week.
With both the European Central Bank (ECB) and Bank of Japan (BoJ) issuing monetary policy decisions this week, the EUR/JPY currency pair will clearly be a center of focus for FX traders.
The US dollar surged sharply on Monday, extending its week-long rebound and rally, as 10-year US Treasury bond yields rose ever closer to the heavily anticipated 3% mark.
The past week has seen a sharp rise in US Treasury yields, which has helped to fuel a US dollar rebound as well as place renewed pressure on recently rallying equity markets.
Stocks cautiously attempted to maintain recent bullish momentum on Wednesday as corporate earnings early in the reporting season continued to show mostly better-than-expected results.
As equity markets continued to rally sharply on Tuesday on the back of a strong start to corporate earnings season and decreased concerns over geopolitical risk, market fear as measured by the VIX volatility index continued to march lower.
The US dollar took a hit to begin the week on Monday after US President Trump issued a tweet that decried rising US interest rates amid his assessment that Russia and China are actively devaluing their respective currencies.
