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. The Canadian economy is anticipated to have added 27.5K new jobs during the reported month, marking a sharp decelerating from a massive growth of 153.7K in November. That said, the unemployment rate is expected to hold steady at 6.0% and the Participation Rate is also likely to remain unchanged at 65.3%.

How could the data affect USD/CAD?

Ahead of the key release, bullish crude oil prices underpinned the commodity-linked loonie and acted as a headwind for the USD/CAD pair. Apart from this, modest US dollar weakness weighed on the major for the second successive day. Stronger Canadian employment details should provide additional lift to the domestic currency, though the data is likely to be overshadowed by the simultaneous release of the US NFP report. 
Nevertheless, any significant divergence from the expected readings might still influence the Canadian dollar and infuse some volatility around the major.

Meanwhile, Dhwani Mehta, Senior Analyst at FXStreet, offered a brief technical outlook and important technical levels to trade the major: “USD/CAD has confirmed a falling wedge breakout on the daily sticks a day before, with the bulls now recapturing the critical 21-Daily Moving Average (DMA) at 1.2798. The pain in the Canadian dollar could be exacerbated if the jobs data fall short of the market’s expectations, prompting the pair to break through the recent range highs around 1.2850. Further up, all eyes will remain on the 1.2900 level. The 14-day Relative Strength Index (RSI) looks north just above the midline, backing the bullish view.”

“Only an upside surprise on the Canadian jobs data or a big disappointment on the US NFP report could save the day for CAD bulls. In that case, the spot could retrace to test the wedge resistance-turned-support at 1.2723, below which a sharp drop towards the bullish 50-DMA at 1.2684 will be in the offing,” Dhwani added further.

Key Notes

  •   Canadian Jobs Preview: Slowdown in jobs growth could worsen CAD’s plight

  •   USD/CAD bounces off daily low, defends 1.2700 mark ahead of US/Canadian jobs report

  •   USD/CAD Outlook: Overnight pullback warrants caution for bulls amid rallying oil prices

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.