CAD Jobs Report: What to Expect of USD/CAD?
Canadian labour market will publish its monthly report early in the NA
session today, with consensus expecting the Employment Change to have
increased by just 1K during April, while the jobless rate is seen
ticking higher to 7.2% from March’s 7.1%.
However, according to strategists at TD Securities, there is room for an upside surprise: “After the addition of an outsized 41k jobs in March—which is more than a one standard deviation increase in an already volatile series—there is a natural tendency to expect a pullback in the subsequent month. However, a closer examination of historical examples of outsized gains that are led by full-time hiring in the service sector (as was the case in March) typically reveals another month of relative strength”.
Regarding USD/CAD, crude oil dynamics continue to be the exclusive driver behind the pair’s price action. That said, the recent pullback in the barrel of West Texas Intermediate from 2016 highs in the $46.80 area has been weighing on CAD and lifting spot to the boundaries of the 1.2900 mark so far. A positive surprise today could add some buying interest to the Canadian dollar, although the release of US Payrolls at the same time will likely eclipse the Canadian docket.