USD/CAD spikes to nearly two-week high on upbeat US NFP, dismal Canadian jobs data

• USD/CAD catches fresh bids following the release of upbeat US monthly employment details.
• The US economy added 528K jobs in July, and the unemployment rate ticked lower to 3.5%.
• The dismal Canadian jobs report overshadows an uptick in oil prices and fails to benefit the loonie.

The USD/CAD pair builds on the overnight positive move and gains some follow-through traction for the second straight day on Friday. The intraday buying picks up pace in reaction to the upbeat US monthly jobs report and lifts spot prices to a nearly two-week high, closer to mid-1.2900s during the early North American session.

The headline NFP showed that the US economy added 528K jobs in July, surpassing the most optimistic estimates and market expectations for a rise of 250K. Furthermore, the previous month's reading was also revised higher to 398K from the 372K, while the unemployment rate also surprisingly edged down to 3.5% from 3.6% in June.

Additional details revealed that the Average Hourly Earnings rose 5.2% YoY and pointed to a further rise in inflationary pressures. The stronger data revives bets for a large Fed rate hike move at the September meeting and pushes the US Treasury bond yields higher, which, in turn, is providing a goodish boost to the US dollar.

Apart from this, weaker Canadian employment details weigh on the domestic currency and turn out to be another factor that contributes to the USD/CAD pair's sudden spike over the past hour or so. Statistics Canada reported that the number of employed people fell by 30.6K in July against estimates for an additional 20K jobs.

The combination of aforementioned factors overshadows a modest uptick in crude oil prices, which fail to lend support to the commodity-linked loonie or hinder the USD/CAD pair's positive move. This, in turn, supports prospects for a further intraday appreciating move, which should allow bulls to reclaim the 1.3000 psychological mark.

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