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Canadian Dollar Awaits Key Job Data

By MarketPulse (Kenny Fisher)ForexOct 08, 2021 06:30AM ET
www.investing.com/analysis/canadian-dollar-awaits-key-job-data-200604433
Canadian Dollar Awaits Key Job Data
By MarketPulse (Kenny Fisher)   |  Oct 08, 2021 06:30AM ET
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The Canadian dollar is drifting on Friday ahead of the North American session. Currently, USD/CAD is trading at 1.2541, down 0.05% on the day. On Friday, both Canada and the US release key employment reports, so we could see some significant movement from the Canadian dollar later in the day.

All eyes are on the US nonfarm payrolls report. This event is always a potential market-mover, but this release has even more significance ahead of a Fed taper, with the timeline for such a move still unclear. Fed policymakers would be more prone to a taper in December or even November if there is solid data showing the recovery is on a strong footing, and a strong NFP would certainly meet the bill. The consensus for the NFP report stands at around 500 thousand new jobs.

A nonfarm payroll report of 500 thousand or more would go a long way in convincing the Fed to commence a taper shortly and would likely boost the US dollar. If the NFP falls short of expectations, the Fed would have an excuse to delay tapering and that would likely result in a rotation out of US dollars. This should make for a busy North American session on the currency markets.

Canada releases employment numbers at the same time, and the forecast is mixed. In August, the economy created 95 thousand jobs, but that is expected to slow to about 60 thousand for September. Unemployment is forecast to drop to 6.9%, down from 7.1%. With the economy in some trouble (GDP has declined for four straight months), some positive job numbers would be warmly welcomed and could give the Canadian dollar a lift.

Solid Canadian employment numbers would be good news for the economy and would support the case to raise rates sooner rather than later. Like the Federal Reserve, the BoC will want to see solid data and ensure that the recovery is gathering steam before tightening policy.

USD/CAD Daily Chart
USD/CAD Daily Chart

USD/CAD Technical

  • There is support at 1.2489. Below, there is support at 1.2385
  • 1.2565 is a weak resistance line. This is followed by resistance at 1.2745

Original Post

Canadian Dollar Awaits Key Job Data
 

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Canadian Dollar Awaits Key Job Data

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