Canada’s labor market is set to post another month of recovery, albeit at a slower pace. Apart from the increase in jobs, a drop in the unemployment rate below 10% could steal the show. US Non-Farm Payrolls may trigger choppy USD/CAD trading, FXStreet’s analyst Yohay Elam reports.
See – Canadian Employment Preview: Six major banks expectations for August jobs report
Key quotes
“The economic calendar is pointing to an increase of 275,000 positions in August, slower than 418,500 reported in July. The expected increase in employment is set to push the jobless rate down from 10.9% to 10.1% – but that heavily depends on the participation rate, which has been more volatile in recent months. The recovering labor market is set to draw discouraged workers back in, pushing participation up from 64.3% to 64.6%.”
“A beat with over 300,000 jobs gained would push the C$ higher while a sub’250,000 increase would be detrimental to the currency.”
“A decrease of joblessness beneath the psychologically significant 10% would likely boost the loonie – perhaps overshadowing the change in jobs. A single-digit unemployment rate would be encouraging for Canada. An unlikely increase to 11% or higher would already weigh on the C$.”
“The US Non-Farm Payrolls – published at the same time – that will likely have a tremendous effect on USD/CAD. America is set to report another month of over one million jobs and its jobless rate is set to dip below 10%. Another surprisingly strong NFP would support the greenback while a slowdown in hiring would weigh on it.”
“Apart from the data, the market mood remains broadly against the US dollar. Despite a correction, the greenback continues suffering from the Federal Reserve’s dovish shift. That may tilt USD/CAD lower in case the figures do not provide significant surprises.”
Share
