USD/CAD Daily Fundamental Analysis for August 05, 2011

By FXEmpire.com

The USD/CAD pair rose back on Thursday after the Bank of Japan decided to intervene in markets to weaken the Yen, which provided the U.S. dollar with strong momentum against major currencies including the CAD, and that contributed in pushing the USD/CAD pair to the upside.

Moreover, concerns from the European debt crisis continued to provide support for safe and lower yielding assets, which provided the USD with more bullish momentum. Also, the ECB signaled it will start a six-month operation to inject liquidity in markets, which provided the USD with more strength to rise against the CAD.

The focus in markets will now turn to the outlook for growth, as recent signs suggest economic growth is slowing in both the United States and Canada, while traders will be eyeing U.S. and Canadian data from their respective labor markets, as the infamous jobs report is due on Friday, and traders will be eyeing the recent developments in the U.S. labor market, and if the data proves disappointing, we should expect the USD to gain more momentum and rise against the CAD.

Friday August 05:

Canada will release the jobs report for July at 11:00 GMT, where the net change in employment is expected to rise by 15.0K, compared with the prior estimate that showed Canadian employers added 28.4 thousand jobs back in June, while unemployment is expected to remain unchanged at 7.4%.

The United States will release the infamous jobs report for the month of July, where the Non-farm payrolls are expected to show that 85,000 jobs were added in July, compared with 18,000 added jobs back in June, while the unemployment rate is expected to remain unchanged at 9.2%.

At 14:00 GMT, Canada will release the Ivey Purchasing Managers index for the month of July, where seasonally adjusted Ivey PMI is expected to expand to 62.0, compared with the prior estimate of 59.9 back in June.