Canadian dollar hits 3-year high on strong jobs

Forex news for North American trade on March 12, 2021:


  • Gold flat at $1721
  • S&P 500 flat at 3940
  • US 10-year yields up 9 bps to 1.63%
  • WTI crude down 42-cents to $65.61
  • CAD leads, NZD lags

The rise in Treasury yields had markets off balance coming into the day but this time was indeed different. A strong consumer sentiment report was a reminder of all the stimulus and reopening that’s coming. Even as US 10-year yields rose above 1.62% to a pandemic cycle high, the jitters were minimal.

The main trade was to sell the US dollar and ignore the rise in yields, which is very counterintuitive to what’s been the norm, and suggests that flows are flowing.

The Canadian dollar made a big move even as its commodity cousins struggled. The Feb jobs report was much stronger than expected with unemployment falling by a full point. USD/CAD initially dropped to 1.2510 from 1.2540 then had second thoughts and rebounded. But after Canadian 5y rates started to run, so did the loonie and then the dominoes fell through 1.25 and the Feb low of 1.2468.

Cable had been sold hard in Asia and Europe but came up for air to trim the daily decline by 60 pips. The euro made a similar move and is wrapping up the day at the US highs, though still below 1.20.

USD/JPY finished the day up 50 pips to 109.00 and tried the downside briefly but even on a day when the dollar was soft, it wasn’t soft enough to fall against JPY.

Overall, it was a tough day to connect the dots and it will get even tougher in the run-up to Wednesday’s FOMC.

What a ride it was this week. Have a great weekend.

Forex news for North American trade on March 12, 2021:

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Categorized as Forex

By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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