US dollar trades low against the Canadian dollar during the Friday Asian session. The weakness of the quote USD/CAD can be related to the mildly bid oil prices. However, Favorable US job data, thin liquidity conditions and an absence of major data/might restrict the pair’s move.
Canada’s main export item, WTI crude oil prices add 0.05% intraday while taking rounds to the five-week top flashed the previous day. This turns to be favorable the CAD.
The hopes of fewer health emergencies due to the Omicron might be the rationale behind the Oil’s move. Elsewhere, Canada seem to take Omicron a bit lightly since many people refused from major lockdown majors around the year-end celebrations. However, Quebec is the odd one out to put a 10:00 pm to 5:00 am curfew in place.
On the other hand, US Initial claims, unemployment benefits dropped to a 198,000 for the week ended Dec. 25 from a revised 206,000 a week earlier. Early this month, claims dropped to a level last seen in 1969.
Economists polled by Reuters had forecast 208,000 applications for the latest week. Claims have declined from a record high of 6.149 million in early April of 2020. The data were the latest to show that Omicron – the newest and most contagious COVID-19 variant so far – has yet to trip up a tight job market or slow a U.S. economy that appears solidly on track to end the year at a gangbusters growth rate.
Holger Schmieding, chief economist at Berenberg said “Despite concerns, the view seems to be that the highly transmissible Omicron COVID-19 variant will be less lethal than feared”
“Markets are back trading the rebound story, the recovery story for 2022,” Schmieding said, noting higher bond yields reflected expectations of economic recovery and subsequently, a reduced pace of central bank support.
USD/CAD 4 Hour Chart:
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