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 employment report for September later this Friday at 12:30 GMT. The Canadian economy is anticipated to have added 20K jobs during the reported month, up sharply from the 39.7K fall reported in August. The unemployment rate, meanwhile, is anticipated to hold steady at 5.4% in September.

Analysts at RBC Economics offer a brief preview of the report and explain: “Canadian employment likely edged higher in September after three straight monthly declines. But as monetary tightening continues, that bump isn’t likely to last. The 40K drop in employment in August was largely due to a sharp 50K pullback in education employment numbers. Those seasonal distortions are expected to fade in September, fueling a 15K increase in overall employment.”

How could the data affect USD/CAD?

The data is likely to be overshadowed by the simultaneous release of the closely-watched US jobs report - popularly known as NFP. That said, a significant divergence from the expected readings should influence the Canadian dollar and provide some meaningful impetus to the USD/CAD pair. Ahead of the key release, bullish crude oil prices, along with the overnight hawkish remarks by Bank of Canada Governor Tiff Macklem, underpins the commodity-linked loonie. This, along with a modest US dollar downtick, exerts some downward pressure on the major.

Strong domestic data should provide an additional lift to the Canadian dollar and pave the way for some meaningful downside for the USD/CAD pair. Spot prices might then accelerate the fall towards the 1.3600 mark, which coincides with a three-week-old ascending trend line. A convincing break below will be seen as a fresh trigger for bearish traders and pave the way for a slide back towards challenging the monthly low, around the 1.3500 psychological mark.

Conversely, any disappointment from the Canadian jobs data and (or) upbeat US NFP report should assist the USD/CAD pair to regain positive traction. The subsequent strength has the potential to lift spot prices to the 1.3800 mark en route to the double-top barrier, around the 1.3835-1.3840 region, or the highest level since May 2020. Some follow-through buying would allow bulls to reclaim the 1.3900 mark. The momentum could get extended to the 1.4000 psychological level, with some intermediate resistance near the 1.3955-1.3960 zone.

Key Notes

  •  Canadian Jobs Preview: Forecasts from six major banks, employment to rise but outlook is dimming

  •  USD/CAD Outlook: Bulls take a brief pause, await US/Canadian jobs data before placing fresh bets

  •  USD/CAD: Positive Canadian jobs unlikely to avoid a retest of 1.3830 highs – ING

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.