Loonie Declines Despite US Market Pause

The Canadian Dollar continued its downward spiral on Thursday, losing another 0.1% against the US Dollar. This decline occurred despite the US market being closed for a national day of mourning, a stark reminder of the Loonie’s ongoing struggle against the Greenback. With limited trading activity due to the holiday, the Canadian Dollar’s weakness became more pronounced, highlighting the lack of support for the currency.

Looking ahead to Friday, key economic data releases are expected to provide further insights into the Canadian and US economies. While Canadian employment and wage figures are scheduled for release, the market’s primary focus will likely be on the highly anticipated US Nonfarm Payrolls report.

Analysts anticipate a slowdown in Canadian employment growth in December, with the unemployment rate expected to tick slightly higher. On the US side, Nonfarm Payrolls are projected to moderate, though any significant deviations from expectations could significantly impact market sentiment.

This backdrop of potentially weak economic data, coupled with a generally cautious global economic outlook, could further strengthen the US Dollar against the Canadian Dollar. The USD/CAD pair has been steadily rising, reaching multi-year highs near 1.4400. The Canadian Dollar has struggled to regain ground, with the 50-day Exponential Moving Average acting as a significant support level for the US Dollar.

Unless a significant shift in market sentiment occurs, the Canadian Dollar faces an uphill battle in the near term, with the risk of further losses against the US Dollar remaining elevated.