USD/CAD rebounded from lows and won back losses

On Thursday, the US dollar regained ground against the Canadian dollar after the publication of upbeat data on benefits for unemployment in the US, as well as a disappointing report on the volume of permits for construction in Canada.
In early US trade, the pair USD/CAD rebounded from 1.2851, the session low, to 1.2902, gained 0.10%.
The pair was likely to receive support at 1.2818, Wednesday's low and resistance at 1.2934, the high of September 6th.
US Department of Labor said, that the number of initial applications for unemployment benefits for the week ending September 3 fell by a seasonally adjusted 4,000 to 259,000 from 263,000 the previous week. Analysts had forecast for a decline of 2,000 to 265,000.
However, sentiment on the dollar remained fragile after the release of weak employment data in the United States on last Friday, as the expectations for rate rise by the Federal Reserve have lowered.
Also on Thursday, Canada's Statistics reported that the amount of issued building permits rose by 0.8% in July, while they were expected to grow by 0.3%. In June, the volume of building permits declined by 5.3%, the value was revised from the preliminary 5.5%.
But the commodity "Canadian" was supported against the background of rising oil prices, as market participants expect fresh weekly information on US stockpiles of crude oil and petroleum products.
Canadian fell against the euro, EUR/CAD rose by 0.86% to 1.4608.

The new "stone in the garden" of the US economy

US economic data continues to disappoint market participants. Yesterday was published the index of activity in the service sector ISM in August. Its value greatly disappointed market participants - figure dropped to a mark of 51.4 from 55.0 in July. This was the worst result for the last 6 years.
US dollar responsed to the data with weakness on all fronts. The EUR/USD in a wave of purchases broke through psychological barrier near 1.1200 and it is now in the 1.1250-60 area, intending to continue to grow.
In the past few days, there was enough evidence, that the US economy remains far from being in the state, which would allow to successfully survive the increase in Fed rates. The labor market, according to the Friday's NFP, is growing with uneven pace, inflationary pressures are not observed, and economic activity is reduced. This may force the US Federal Reserve to postpone the resumption of the cycle of rate hikes until next year.
Any new signs of recession in the US economy would immediately lead to a selling USD, so the major currency pairs will be subject to high volatility.

RBS: We did not expected raise rates by the Fed this year before, we do not expect it now

The published report from the meeting of the FOMC in July turned out to be less combative than market expectations. Committee members were divided on the need to continue raising interest rates. However, we should keep in mind, that the head of the Fed, Janet Yellen, is one of the most "pacifist" members of the FOMC.
Thus analysts of the bank remain of the view, that the Fed has no reason to hurry to increase interest rates and this move looks very unlikely in September.
Although recent US economic data are very encouraging, obstacle to continued tightening of monetary policy is the lack of sustained inflation. The increase in interest rates in December is still possible, but analysts of the bank are skeptical that it will happen even then.

Overview of NZD/USD

On Thursday the worst results from the pairs showed the New Zealand dollar. Initially, after the RBNZ cut interest rates, NZD/USD rose, as investors hoped, that the decline will be by 0.50% instead of 0.25%. However, when all has settled, market participants realized, that the RBNZ is not only lowered the interest rate to 2%, but warned about their plans to reduce the rates further. Chairman Graham Wheeler decided, that there is no need to cut rates by 0.5% now, but has made it clear, that a further easing is needed. Exactly "needed" rather than "may need". In the forecasts of RBNZ is inherented a decline of 0.6%, so a further reduction by 0.25% in this year is quite possible, especially if the NZD/USD does not register a fall. The Thursday's growth of quotations was completely unjustified, but Friday's pullback corresponded to the fundamental logic. The main objective for reducing the rates by the Reserve Bank's officials were weakening of NZD positions, so they will continue to say and do everything possible to send the currency down. NZD/USD will soon be close to the level of 71 cents.

Overview of AUD/USD

After the strengthening of AUD/USD, sellers have intensified. But their activity is reduced by the weakening in prices. This may due to the fact, that the pair is approaching important 0.7660 support level, which is a "mirror-level" on a large time period. The significance of this level of support is difficult to identify. Given all this, for the continuation of the downward movement, sellers need a fairly powerful driver of growth of the US dollar.
In fact, the absence of a driver is another reason for the decline in sellers activity. As we can see, the technical factor (strong support) and the fundamental (no fundamental reasons for the substantial strengthening of the US dollar) does not allow to count on a decrease in quotations of the pair.
Friday's weak US data, which is negative for the US dollar, should be positive for the pair.
A break of 0.7690 resistance could lead to another wave of strengthening for the pair, while the breakdown of 0.7625 support could be the first signal of the ability of sellers to continue to decline further to the base figure.