USD/CAD rebounds modestly on Friday, drops 250 pips over the week

USD/CAD is rising modestly on Friday still sharply lower for the week. The pair bottomed earlier today at 1.2060, the lowest level since May 2015 and, at the moment, it trades at 1.2130/35, up 20 pips for the day.

CAD: Bad day, great week 

The loonie lost strength today after the release of the August Canadian employment report. The headline showed a positive net change in employment of 22K above the 15K expected but a  significant decline in full-time jobs (-88K). 

Canada: Unemployment rate declined to 6.2%, matching most recent low of October 2008

USD/CAD rose back above 1.2100 after jobs data and then climbed to 1.2160 amid a sharp decline in crude oil. The WTI barrel dropped more than 3%. 

WTI plummets to $48 as hurricanes weigh on refining activity

Despite today’s slide, the Canadian dollar is still among the top performers of the week. The decision of the Bank of Canada on Wednesday to raise again the main interest rate from 0.75% to 1.0% boosted sharply the currency. Also, CAD continues to be supported by the latest round of economic data that shows activity expanding firmly. 

BoC hikes rates with a somewhat cautious statement - Wells Fargo

The radar shows the 1.20 handle 

USD/CAD is about to post the fourth weekly decline in a row. Technical indicators in the weekly chart show extreme oversold readings, like the RSI moving below 30, but so far, no signals of a bearish correction are seen. If the decline continues, the pair is likely to challenge the 1.2000 handle for the first time in two years.