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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 December later this Friday at 13:30 GMT. According to the consensus estimates, the number of employed people is expected to have risen by 25K during the reported month, marking a partial recovery of over 71K jobs lost in the previous month. Meanwhile, the unemployment rate is expected to tick lower to 5.8% from 5.9% previous.

Analysts at TD Securities are also looking for Canada’s labour market to bounce back with the creation of 25k jobs in December, in line with the market consensus. “Goods-producing industries should lead the recovery after bearing the brunt of recent layoffs, while the unemployment rate should retreat to 5.7% from 5.9% as wage growth cools from 4.4% to 4.0% (market: 5.8%, 4.2%, respectively).”

How could the data affect USD/CAD?

Yohay Elam, NDDFX’s own analyst offered his take on the possible market reaction to the employment details: “If Canada gained around 20,000 positions last month, the response would likely be more muted, allowing wage growth to have an outsized impact. IF paychecks remain around November’s levels, the C$ still has room to edge higher given the positive bias. The probability is medium.”

“There is a good case for a considerable rebound in jobs, better than average estimates. In this scenario, the Canadian dollar has significant room to rise, as it already enjoys an uptrend. The probability is high,” he added further.

Yohay also explains the scenario, wherein an unlikely disappointment – having a low probability – may send the C$ plunging. “A meagre increase in jobs cannot be ruled out, nor can a third consecutive month of losses. In this case, the loonie may find itself in a lonely position, falling even if other currencies gain against the greenback amid a weak US labor market report. The probability is low.”

Key Notes

   •   Canadian Jobs Preview: Why comeback CAD has room to extend its gains

   •   USD/CAD holds steady above mid-1.3000s, US/Canadian jobs data eyed for fresh impetus

   •   The Prospects of USD/CAD Rebound Continuation

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.

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