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The March LFS will capture an economy in rapid transition from full employment to one experiencing double-digit unemployment rates. Meanwhile, after coiling lower towards 1.40, the move is beginning to look a bit too good to be true for USD/CAD, according to analysts at TD Securities.

Key quotes

“We pencil in just 350k jobs lost during the month, which would represent the largest decline on record, but note there is scope for a significantly weaker print. This would push the unemployment rate to 7.3% and while hourly wage growth should hold near 4% y/y, we expect to see a pullback in weekly wage growth owing to fewer hours worked.”

“The market will need to calibrate to the economic reality and as such, USD/CAD will need to adjust – higher. This report should be a crude reminder of that, and we remain long USD/CAD.”

“Fade dips (when liquidity permits) towards 1.3920; interim resistance located at 1.4080, which will be the gateway to a return towards 1.43+.”