Canadian Dollar continues slow grind lower on Thursday

• The Canadian Dollar shed another 0.1% on Thursday as buyers evaporate.
• Canada remains open for business while the US is taking the day off.
• Holiday-thinned markets are doing few favors for the Loonie except slow the bleed.

The Canadian Dollar (CAD) chalked in a third straight losing day against the US Dollar on Thursday, falling for a third straight day and highlighting the Loonie’s ability to lose ground against the Greenback even when US markets aren’t open. 

Thursday was yet another slim showing for Canadian data on the economic calendar. CAD traders will be looking ahead to Friday’s release schedule with Canadian labor and wages data on the offering. However, most of the market will be looking forward to Friday too, with another round of US Nonfarm Payrolls (NFP) jobs data on the docket as well.

Daily digest market movers: CAD markets pull back slightly ahead of key labor print

• The Loonie’s ability to lose ground while everyone else is on holiday is nothing short of remarkable.
• US markets are shuttered in observation of a day of mourning in honor of the passing of former President Jimmy Carter, who died at age 100 in December.
• Canadian Net Change in Employment, due on Friday, is unlikely to spark much faith in the CAD as the figure is expected to decline by half, from 50.5K in November to 25K in December.
• The Canadian Unemployment Rate is also expected to tick higher from 6.8% to 6.9%.
• On the US side of things, US NFP net jobs additions are expected to ease back to 160K in December from the previous 227K, and traders will be keeping an eye out for any sharp revisions.
• The US Michigan Consumer Sentiment Index is also expected to slip for the first time in six months, but only slightly.
• A wide range of tepid to softening data could could broader market flows firmly planted on the buy side of the Greenback, further hobbling the Loonie.

Canadian Dollar price forecast

The Canadian Dollar remains caught in a tight spiral against the US Dollar, trading into multi-year lows and keeping the USD/CAD pair bolstered into the 1.4400 region. CAD weakness has been the name of the game, sending the Greenback to its highest bids against the Loonie since the pandemic.

USD/CAD is up over 7% from September’s low end near 1.3400, and although it looks like the CAD isn’t going to lose any more ground for the time being, Loonie bidders remain unable to prop things up and get the pair pushed back down below 1.4300. The immediate barrier to a CAD recovery will be the 50-day Exponential Moving Average (EMA) climbing into 1.4200, putting a technical floor underneath the Greenback.

USD/CAD daily chart