The Japanese yen is the only currency to rise against the US dollar since yesterday’s close. The Australian dollar was the weakest currency in a reasonably quiet overnight session with traders cautious ahead of event risk this weekend and next week.

USDCAD climbed steadily overnight. It traded down to 1.2977 ahead of the Canadian employment report.  Weaker than expected data lifted USDCAD to 1.3037 immediately after the release but prices recovered just as quick.  USDCAD is hovering around the 1.2195 area as of 0650 am PDT.

The Canadian employment report was expected to show a rebound from the 1,000 jobs lost in April.  Instead, Canada lost another 7,500.  Even worse, all the losses were in full-time jobs.  The jobless rate was steady at 5.8%.

Canada May Housing Starts were a tad weaker than forecast as well, but a gain in Capacity Utilization offset that news.  It was below the forecast but better than the previous release.

Today’s mix of data contrasts with recent statements by Bank of Canada Governor Stephen Poloz. On Thursday, he gave a relatively upbeat outlook for the domestic economy although he hedged himself by noting concern about trade risks.

Those trade risks have been elevated.  President Trump took umbrage at Prime Minister Trudeau and French President Macron’s comments yesterday.  The duo said they would tell Trump he is wrong to impose tariffs.

The President has responded with many tweets railing against Canada “unfair trade practices,’ including complaints about dairy and agricultural products.

Prime Minister Trudeau’s Leadership Program agenda doesn’t have much time devoted to trade talks.  President Trump is sure to change that.Overnight, the Australian dollar took a beating when China reported a narrowing of their Trade surplus to US $24.9 billion from $28.3 billion.  AUDUSD dropped from 0.7625 to 0.7565 where is currently trading.  NZDUSD ignored the noise and traded in a tight 0.7010-0.7029 range.

USDJPY extended its retreat from this week’s 110.25 peak.  It broke support at 109.50 and touched 109.20 before inching higher..  Another drop in us Treasury yields and a minor shift to risk aversion trades is behind the selling.

EURUSD traded with an offered tone overnight.  Weaker than expected German Industrial Production, some shrinkage in the Trade surplus and pre-weekend profit-taking contributed to the decline from 1.1810 to 1.172 in early New York trading.

There isn’t any actionable US data on tap, and with the pending event risk from the central bank meetings and G-7, trading may be subdued.  President Trump is the wild card.

USDCAD Technical Outlook

The intraday USDCAD technicals are bullish while prices are above 1.2870 which guards the February uptrend line at 1.2750. A break above 1.3065 would lead to 1.3125.  For today, USDCAD support is at 1.2970 and 1.2930.  Resistance is at 1.3065 and 1.3110

Today’s Range 1.2970-1.3060