February 7, 2025
- NFP result is rather tame
- Canada adds more jobs than expected
- US dollar opens quietly after uneventful overnight session
FX at a Glance
USDCAD open 1.4325 overnight range 1.42891.4327, close 1.4306
USDCAD drifted lower alongside broad US dollar weakness yesterday and traded quietly overnight. Statistics Canada reported that Canada gained 76,000 in jobs in January, easily beating the forecast of 25,000 while the unemployment rate ticked down to 6.6% from 6.7%.
The US nonfarm payrolls report was rather tepid, with just 143,000 new jobs reported (forecast 170,000) but a drop in the unemployment rate to 4.0%. However, that disappointment was offset by a combined 100,000 upward revision to the December and November numbers.
USDCAD losses will be limited as the risk of Trump tariffs is hanging over the economy. Trump may react negatively if he ready any of the articles suggesting that he got out-negotiated or that he blinked after he delayed the tariffs.
USDCAD Technicals
The intraday USDCAD technicals are mildly bearish below 1.4360 and looking for a break below 1.4270 to extend losses to the 1.4240 area, then 1.4200. A move above 1.4360 negates the intraday downtrend and targets 1.44201.4380 to extend gains to 1.4440.
The longer term outlook is unchanged. USDCAD is likely to be stuck in a 1.4250-1.4550 range until March 1, as the threat of Trump tariffs will underpin USDCAD.
For today, USDCAD support is 1.4270 and 1.4240. Resistance is 1.4360 and 1.4420.
Today’s Range: 1.4320-1.4420
Chart: USDCAD hourly
NFP-No Big Deal
The US gained 143,000 jobs in January, well below the forecast for a 170,000 gain but still a relatively strong number. In addition the unemployment rate dipped to 4.0% from 4.1% and the combined results are not expected to have any impact on the Fed’s existing monetary policy outlook.
EURUSD NY Open: 1.0361
Overnight Range: 1.0356-1.0406
EURUSD see-sawed in a narrow range, with negative German industrial production data (actual -2.4%) m/m helping to knock prices from the overnight peak. The risk of Trump tariffs on the EU should limit EURUSD gains.
GBPUSD NY Open: 1.2418
Overnight Range: 1.2407-1.2510
GBPUSD has almost fully recouped its losses after the dovish Bank of England monetary policy meeting yesterday. The BoE slashed its GDP forecast and increased its inflation projections, which raised the fear of stagflation. There was some good news: the Halifax House Price Index rose 0.7% m/m in January. Bank of England Governor Andrew Bailey complained that a bloated public service, which gained 500,000 employees since the pandemic, has not been matched by a rise in productivity. That is something that Bank of Canada Governor Tiff Macklem doesn’t talk about.
USDJPY NY Open: 152.52
Overnight Range: 151.81-152.89
USDJPY climbed steadily overnight but maintains a bearish bias due to rising expectations that the BoJ will raise rates while the Fed may soon have to start easing policy again.
AUDUSD NY Open: 0.6284
Overnight Range: 0.6273-0.6298
AUDUSD had an uneventful session, and it is in the middle of its overnight band with traders on hold until today’s US employment data. However, the ongoing China/US trade war will act as a drag on gains.
NZDUSD NY Open: 0.5677
Overnight Range: 0.5672-0.5690
The currency pair traded quietly in a narrow range ahead of today’s US employment data. NZDUSD has a bearish outlook due to the risk of an escalating US and China trade war. The RBNZ is expected to cut the Overnight Cash Rate (OCR) by 50 bps to 3.75% on February 19 due to sluggish economic growth and rising unemployment.
USDMXN NY Open: 20.4791
Overnight Range: 20.4295-20.5160
The Mexican peso was directionless overnight after slipping from 20.6590 following the 50 bp rate cut to 9.50% by the Bank of Mexico (Banxico). Policymakers acknowledged uncertainty around Trump tariffs while also forecasting that inflation will fall to its target by Q3 2026.
FX high, low, open (as of 6:00 am ET)
China Snapshot
PBoC fix: 7.1691 vs exp. 7.2535 (prev. 7.1693).
Shanghai Shenzhen CSI 300 rose 1.30% to 3892.70
China initiated a World Trade Organization dispute and Hong Kong will file complaint a WTO complaint over the US 10% tariff saying it violates WTO rules.
