When is the Canadian jobs report and how could it affect USD/CAD?
Canadian employment details overview
Statistics Canada is scheduled to publish the monthly jobs report for March later this Friday at 12:30 GMT. The economy is estimated to have added 100K jobs during the reported month, down sharply from February's stellar 259.2K. That said, this would also still mark the second straight month of strong reading, enough to lower the unemployment rate to 8.0% from 8.2% previous.
Meanwhile, analysts at TD Securities were more optimistic about the report and wrote: “We look for the Canadian economy to add back another 150K jobs in March as the continued rollback of emergency measures in Ontario facilitates further recovery across parts of the service sector. Job growth of 150K would pull the unemployment rate lower to 7.7% and leave total employment just 2.3% below pre-covid levels.”
How could the data affect USD/CAD?
Given the Bank of Canada's increased focus on the jobs market, a stronger than anticipated report will fuel speculations that policymakers could start pulling back on stimulus sooner rather than later. This could also potentially act as a positive trigger for the loonie, though will probably want to see more evidence that there is a sustained recovery. Hence, any immediate market reaction might turn out to be short-lived, suggesting that any meaningful slide in the USD/CAD pair could be seen as a buying opportunity.
From a technical perspective, the pair, so far, has been struggling to build on its momentum or find acceptance above the 1.2600 mark. This is followed by the 50-day SMA barrier near the 1.2625-30 region, making it prudent to wait for some strong follow-through buying before positioning for any meaningful upside.
On the flip side, weakness below the overnight swing lows, around the 1.2560-55 region could drag the USD/CAD pair lower. That said, the key 1.2500 psychological mark should act as a strong base and help limit any further decline, at least for the time being.
Key Notes
• Canadian Employment Preview: Forecast from six major banks for March jobs report
• USD/CAD Price Analysis: Bulls await a move beyond 1.2625-30 confluence hurdle
• USD/CAD to hover around a 1.23-1.27 range in April – Mizuho
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.