Investing.com - The Canadian Dollar weakened against its U.S. counterpart on Friday, as risk sentiment turned uncertain following mixed U.S. nonfarm payrolls data. The NFP print showed that the U.S. economy added more jobs than expected in February, but showed a sharp downwards revision to the January numbers.
Canadian employment figures meanwhile had little impact on the loonie, with the reading overshadowed by the U.S. jobs print. The Canadian economy added a net 40,700 jobs in February, smashing past expectations for a net gain of 20,000 jobs. However, the jobless rate ticked higher to 5.8%.
The loonie however managed to notch a weekly win, as a hawkish hold and commentary from the Bank of Canada forced markets to reprice expectations for rate-cuts from the BoC. The Canadian central bank on Wednesday held its benchmark rate on hold at a 22-year high of 5%, noting that it was too early to begin considering rate cuts.
Money markets are now pricing in rate cuts from the Bank of Canada beginning in July, rather than in June, as had been the expectation prior to the BoC rate decision.
Meanwhile, the Fed is expected to begin rate cuts in June, an expectation reinforced by Senate testimony from Fed Chair Powell that reiterated rate-cuts are coming soon. On Thursday, the Fed chair noted that the U.S. central bank was "not far" from rate cuts, causing the U.S. dollar to lose ground against a basket of major currencies.
Up next for the pair, all eyes will be on the U.S. February Consumer Price Index reading on Tuesday. The Canadian economic docket will meanwhile remain empty of major data releases.
On a technical level for the pair, analysts at FXStreet expect the pair to remain range-bound in the near term.
They note that “The long-term moving average has flatlined just below the 1.3800 handle for most of 2024, and the pair is set to continue struggling in the near term as it churns within a rough range between 1.3600 and 1.3400.”