USD/CAD drop overwhelmed by USD demand
The inability of the loonie to hold gains after a blockbuster jobs report isn't a great sign for the currency.
USD/CAD fell as low was 1.2511 on the headlines from 1.2545 but it's now completed the round trip. A big portion of that is due to broader USD demand -- it's near the highs of the day across the board on rising Treasury yields.
Within the report, the details are about what you would expect. The job rebound was all in retail, food services and accommodation -- the reopening sectors.
The rebound sprung from the 1.2500 level and there's also significant support just below at the Feb low of 1.2468. Given the risk backdrop today, it's tough to envision a breakdown.
There's been a recent trend (excluding last week) of higher yields on Fridays so that doesn't bode well for USD/CAD shorts.
Loonie longs may look to other crosses to avoid the USD chop.
