Canada’s jobs overview
Statistics Canada will publish its labor market figures for the month of May later in the session, with consensus estimates suggesting unemployment rate to hold steady at 5.8% and the number of employed people rising by 17.5K.
In view of strategists at TD Securities, “We look for the economy to add a relatively modest 8k jobs in May, roughly 10k below the six-month trend, while a rebound in part-time employment should add to the downbeat tone. Full-time job growth has outperformed part-time by 160k over the last two months, leaving us biased towards a correction. Our base case is for unchanged average hourly earnings (3.3% y/y for permanent employees), with risks for a significant acceleration unlikely. This is especially true given the sharp decline in March SEPH wage growth and deceleration in the national and productivity accounts in Q1.”
How could it affect USD/CAD?
The USD/CAD pair was seen building on this week’s smart recovery from 50-day SMA and is holding comfortably above the key 1.30 psychological mark, primarily led by a goodish pickup in the US DOllar demand. Even the slightest of disappointment could provide an additional boost and lift the pair back towards the 1.3065 region, 2-1/2 month highs set on Tuesday.
On the downside, any meaningful retracement is likely to find support near the 1.2930-25 region, which if broken might turn the pair vulnerable to break back below the 1.2900 handle and head towards retesting 50-day SMA support, currently near the 1.2865 region.
About Canadian jobs report
The employment report released by the Statistics Canada is a leading indicator for the Canadian Economy. A rise in the employment change/fall in the unemployment rate has positive implications for consumer spending, which stimulates economic growth and is seen as positive (or bullish) for the CAD, while the opposite could negatively impact the domestic currency.
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