5 Dec 2014
CAD is soft into the employment and trade release – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes that CAD is soft into the employment and trade release, and any upside surprise would highlight impact of U.S. economic strength on Canada.
Key Quotes
“CAD is soft, down 0.2% since yesterday’s NA close. Today’s employment and trade releases are important updates from the domestic economy that has proven surprisingly resilient. Consensus expectation for employment is that Canada had no employment gains in November, with the unemployment rate ticking up to 6.6%. The release has been volatile in 2014, with large and inconsistent deviations from expectations. Both the September and October releases detailed strong job gains, 74k and 43k, respectively; and accordingly the risk in today’s November release is a bit of give back.“
“The international merchandise trade surplus is expected to rise to $0.15bn. An important release where any strength will highlight the importance of U.S. economic strength on Canada’s export market.”
“Over the last week, CAD has held in well, flat since November 28th; where as EUR, GBP, JPY, AUD and NOK have all reached new lows and in percentage terms, EUR is down 0.8%, AUD, NOK and MXN are down 1.7%, JPY is down 1.6% and NZD is down 1.1%.”
“CAD’s resilience might have some ties into Canada’s strong ties into the U.S. economy; however it also warns of potential CAD positive flows being pushed through the market. Accordingly, there could be some risk if these flows ease.”
“USDCAD short‐term technicals: bullish—technicals warn of upside risk and we would expect a near‐term test up to the year‐to‐date highs of 1.1467; support lies at the 21‐day MA of 1.1330.”
Key Quotes
“CAD is soft, down 0.2% since yesterday’s NA close. Today’s employment and trade releases are important updates from the domestic economy that has proven surprisingly resilient. Consensus expectation for employment is that Canada had no employment gains in November, with the unemployment rate ticking up to 6.6%. The release has been volatile in 2014, with large and inconsistent deviations from expectations. Both the September and October releases detailed strong job gains, 74k and 43k, respectively; and accordingly the risk in today’s November release is a bit of give back.“
“The international merchandise trade surplus is expected to rise to $0.15bn. An important release where any strength will highlight the importance of U.S. economic strength on Canada’s export market.”
“Over the last week, CAD has held in well, flat since November 28th; where as EUR, GBP, JPY, AUD and NOK have all reached new lows and in percentage terms, EUR is down 0.8%, AUD, NOK and MXN are down 1.7%, JPY is down 1.6% and NZD is down 1.1%.”
“CAD’s resilience might have some ties into Canada’s strong ties into the U.S. economy; however it also warns of potential CAD positive flows being pushed through the market. Accordingly, there could be some risk if these flows ease.”
“USDCAD short‐term technicals: bullish—technicals warn of upside risk and we would expect a near‐term test up to the year‐to‐date highs of 1.1467; support lies at the 21‐day MA of 1.1330.”