When is the Canadian monthly jobs report and how could it affect USD/CAD?

Canadian employment details overview

Statistics Canada is scheduled to publish the monthly jobs report for March later this Friday at 12:30 GMT. The Canadian economy is anticipated to have added 80K jobs during the reported month, marking a sharp deceleration from the 336.6K rise reported in February. Meanwhile, the unemployment rate is expected to edge lower from 5.5% to 5.4% in March.

Analysts at NBF offered a brief preview and sounded less optimistic about the report: “Although we believe that the labour market situation continued to improve during the month, supported by the amelioration of the epidemiological situation, we still expect a flat employment print. Far from being the start of a downtrend, this decline would in fact represent only a normalization after February’s breathtaking figure (+336.6K). Assuming the participation rate stayed unchanged at 65.4%, this result would leave the unemployment rate at 5.5%.”

How could the data affect USD/CAD?

Ahead of the key release, the USD/CAD pair was seen consolidating its recent strong recovery from the YTD low, around the 1.2400 mark touched earlier this week. Softer Canadian employment figures could exert pressure on the domestic currency and allow spot prices to push through the very important 200-day SMA barrier.

Conversely, a stronger reading might prompt some selling, though the immediate market reaction is likely to be short-lived. The prevalent bullish sentiment surrounding the US dollar should continue to lend support to the major amid weaker crude oil prices, which tend to undermine the commodity-linked loonie. This, in turn, suggests that the path of least resistance for the pair is to the upside.

Key Notes

  •   Canadian Net Change in Employment March Preview: Is the labor market passe?

  •   Canada Employment Preview: Forecasts from five major banks, building on the remarkable surge seen in the prior month

  •   USD/CAD: Loonie to benefit only temporarily from a positive Canadian jobs report – Commerzbank

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.