Statistics Canada is scheduled to publish the monthly employment report for October later this Friday at 12:30 GMT. The Canadian economy is anticipated to have added 10K jobs during the reported month, down from the 21.1K rise reported in September. The unemployment rate is anticipated to edge higher from 5.2% to 5.3% in October.
According to analysts at NBF: “Recent economic indicators point to a slowdown in growth in Canada, a phenomenon that could be reflected in employment data. Layoffs may well have remained low during the month, but we believe this could have been offset by a slowdown in hiring amid declining small business confidence. Our call is for a 5K increase. Despite this gain, the unemployment rate may increase from 5.2% to 5.4%, assuming the participation rate rose one tick to 64.8% and the working-age population grew at a strong pace.”
The data is more 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 USDCAD pair. In the meantime, a sharp intraday rise in crude oil prices, to a nearly one-month high, underpins the commodity-linked Loonie. This, along with a modest US Dollar pullback from a two-week high touched on Thursday, is seen exerting heavy downward pressure on the major.
Strong domestic data should provide an additional lift to the Canadian dollar and pave the way for a further intraday depreciating move for the USDCAD pair. Spot prices might then turn vulnerable to weaken further below the 1.3600 mark and aim back to test the 1.3500 psychological mark, which now coincides with the 50-day SMA.
Conversely, any disappointment from the Canadian jobs data and (or) upbeat US NFP report should assist the USDCAD pair to attract fresh buying. Any attempted recovery, however, might confront some resistance near the 1.3675-1.3680 region. This is closely followed by the 1.3700 round figure and the next relevant hurdle near the 1.3735-1.3740 region. A sustained strength beyond the latter will negate any near-term negative bias and allow spot prices to aim back to conquer the 1.3800 mark.
• Canadian October Jobs Preview: Labor market upturn in the doldrums
• Canadian Jobs Preview: Forecasts from five major banks, quite tepid jobs gain in October
• USDCAD remains heavily offered below mid-1.3600s ahead of US/Canadian jobs data
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.
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.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.