CAD trades soft after Friday’s job data

Key Movers

The US Dollar Index (DXY) slipped a bit coming out of last week’s gains and was currently down 0.21% at the time of writing. Last week markets saw the biggest weekly rise since July, a happy sight for sellers after the declines seen in late 2023. Markets are looking ahead to Consumer Price Index (CPI) data later this week. Depending on this data, this could slow USD’s downward trend. There is a slew of data releases set for this week including the US trade balance tomorrow, MBA mortgage applications and monthly wholesale inventories Wednesday, CPI data and jobless claims Thursday, and monthly Core Producer Price Index (PPI) Friday.

The EUR/USD pair held steady around 1.0950. There was a lot of data from the eurozone including the Euro-Area January Sentix Investor Confidence which rose slightly to -15.8 after -16.8 in December. Consumer confidence was at -15.0, which remained on par with the forecasted -15.1 and slightly better than the previous -16.9. In German data, exports month-over-month were up 3.7%, which was better than the forecasted 0.3% and previous -0.2% as demand in the EU increased strongly. This comes after a long stretch of disappointing data. German factory orders on the other hand were weaker than expected with a 0.3% increase in demand. This fell short of analysts’ expectations of a 1.1% gain. As markets look forward, according to Barclays, there is a 40% chance that the European Central Bank’s key rate will close out 2024 between 2% and 3%, and a 35% chance that it will remain above 3%. There’s only a one-in-four chance that the rate will need to be lower than 2% by the end of the year.