USD/CAD pushes higher, in yearly tops at 1.3470

The greenback keeps its march north unabated so far this week, now lifting USD/CAD to fresh YTD highs near 1.3470.

USD/CAD bid after upbeat ADP

The pair advanced to fresh 3-month highs around 1.3470 after US ADP report surprised to the upside earlier today, showing the US private sector has created nearly 300K jobs during last month, beating forecasts at 190K and up from January’s 261K.

Today’s data increased the optimism ahead of the more relevant Non-farm Payrolls due on Friday (190K exp.) while it confirmed once again the solid health of the labour market.

Additionally, US yields have climbed to fresh highs in the wake of the release, adding to the already firm expectations of a rate hike by the Federal Reserve at the March meeting.

On the CAD side, the currency stays mainly driven by policy divergence between the Bank of Canada and the Federal Reserve via US-CA yield spread differentials, especially in the shorter end of the curve. In addition, extra support for the Canadian currency came last week from the speculative community, where net longs have increased to the highest level since early February 2013.

USD/CAD significant levels

As of writing the pair is up 0.33% at 1.3457 and a breakout of 1.3511 (high Dec.30) would aim for 1.3581 (high Dec.27) and finally 1.3601 (high Dec.28). On the flip side, the immediate support aligns at 1.3398 (low Mar.8) followed by 1.3369 (low Mar.6) and finally 1.3294 (100-day sma).