USD/CAD attracted some dip-buying near the 1.2700 mark
The USD/CAD pair reversed an intraday dip and inched back closer to its daily high, at around the 1.2720-25 region, during the European session. The pair managed to defend and attract some buying near the 1.2700 round-figure mark on Friday, though the attempted bounce lacked bullish conviction. Crude oil prices eased a bit from the highest level since mid-November, which undermined the commodity-linked loonie and acted as a tailwind for the USD/CAD pair. On the other hand, a generally positive tone around the equity markets weighed on the safe-haven US dollar amid retreating US Treasury bond yields. This, in turn, failed to provide any meaningful impetus to the USD/CAD pair. Investors also seemed reluctant ahead of the monthly jobs data from the US and Canada.
The market-moving NFP report, due later during the early North American session, will be scrutinized for evidence reinforcing the need for higher interest rates. It is worth recalling that the December FOMC meeting minutes that some policymakers want to tighten monetary policy faster to combat stubbornly high inflation. Higher employment and/or wages could provide the catalyst for higher rates and a stronger US dollar, and vice-versa if the opposite. From the perspective of CAD, traders will take cues from oil price dynamics and possibly grab some short-term opportunities. Nevertheless, the bias remains to the upside as the USD/CAD pair seems poised to snap two successive weeks of the losing streak.