When is the Canadian monthly jobs report and how could it affect USD/CAD?

Canadian employment details overview

Statistics Canada is scheduled to publish the monthly employment details for July later this Friday at 12:30 GMT. The Canadian economy is anticipated to have added 20K jobs during the reported month, up sharply from the 43.2K decline reported in June. Meanwhile, the unemployment rate is expected to edge higher to 5.0% in July from the 4.9% previous.

Analysts at TD Securities (TDS) are more optimistic about the report and explain: “We look for job growth of 38k in July, driven by a partial rebound for trade services and natural resources after their sharp decline in June. Full-time hiring should lead the increase, while stronger labour force participation should keep unemployment stable at 4.9%. We also expect to see wage growth firm to 6.0% y/y in July, although AHE (Average Hourly Earnings) should slow on a m/m basis.”

How could the data affect USD/CAD?

The data is likely to be overshadowed by the simultaneous release of the closely-watched US jobs report - popularly known as NFP. That said, a significant divergence from the expected readings should influence the Canadian dollar and provide some meaningful impetus to the USD/CAD pair.

Heading into the key data risks, spot prices climbed back closer to the weekly high amid a goodish pickup in the USD demand. That said, a goodish recovery in crude oil prices could underpin the commodity-linked loonie and cap the upside for the USD/CAD pair.

Any disappointment from the Canadian data would be enough to assist the USD/CAD pair to confirm a near-term bullish breakout through the 1.2900 mark. The subsequent strength would set the stage for a more towards mid-1.2900s en route to the 1.3000 psychological mark and the next relevant hurdle near the 1.3055-1.3060 region.

Conversely, stronger domestic data should lend additional support to the Canadian dollar and prompt fresh selling around the USD/CAD pair. That said, any further decline below the 1.2835-1.2830 region is more likely to find decent support near the 1.2800-1.2790 zone. A convincing break below the latter would be seen as a fresh trigger for bearish traders. Spot prices could then accelerate the fall towards the 1.2700 mark before eventually dropping to the 1.2655-1.2650 region.

Key Notes

  •   USD/CAD Forecast: Bulls await move beyond 1.2900, US/Canadian jobs report in focus

  •   USD/CAD buyers approach 1.2900 ahead of US/Canada employment data

  •   CAD/USD about to move towards the 0.7877 level

About the Employment Change

The employment Change released by Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive, or bullish for the CAD, while a low reading is seen as negative or bearish.

About the Unemployment Rate

The Unemployment Rate released by Statistics Canada is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labour market. As a result, a rise leads to weaken the Canadian economy. Normally, a decrease of the figure is seen as positive (or bullish) for the CAD, while an increase is seen as negative or bearish.