Canadian Dollar keeps losing ground as US data beats expectations.
Strong US economic outlook, tight labour market put Fed easing hopes into question.
Higher Oil prices soften Canadian Dollar’s reversal.
The Canadian Dollar (CAD) is being sold for the second day in a row on Tuesday as the Greenback consolidates gains, buoyed by strong US macroeconomic data. The strong rebound in February’s US Factory orders and the higher-than-expected JOLTS Job Openings add to evidence of a strong US economy and put the Federal Reserve’s (Fed) near-term easing plans into question.
Tuesday’s data confirms Monday’s picture of a strong manufacturing sector combined with a tight labour market. This “no-landing” scenario provides fresh reasons for Fed hawks to keep borrowing costs higher for longer and is pushing up US Treasury yields.
Investors will be waiting for Friday’s Nonfarm Payrolls Report to confirm these fears, but the data seen so far this week has prompted traders to scale back bets of a June cut. The Canadian Dollar has lost 0.3% in the last two days with the rally in Oil prices keeping the Loonie from further depreciation.
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