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 details for June later this Friday at 12:30 GMT. The Canadian economy is anticipated to have added 22.5K jobs during the reported month, down from the 39.8K rise reported in May. Meanwhile, the unemployment rate is expected to hold steady at 5.1% in June.

Analysts at Citibank sounded slightly more optimistic and offered a brief preview of the report: “We expect a solid 45K increase in employment in June, similar to the rise in May but with two-sided risks. The path of wage growth however will likely be more important to determine 
whether the BoC starts to ease up on aggressive rate hikes later this year or if they remain more hawkish in line with the Fed.”

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.

Heading into the key data risks, spot prices regained positive traction amid an extension of the recent strong US dollar bullish run. That said, some follow-through uptick in crude oil prices underpinned the commodity-linked loonie and caped the upside for the USD/CAD pair.

Stronger domestic data should lend additional support to the Canadian dollar and exert some downward pressure on the major. That said, the daily swing low, around the 1.2955-1.2950 area, might continue to act as immediate support, below which the USD/CAD pair could slide further towards the 1.2900 mark. The latter should act as a strong base for the major, which if broken decisively would negate any near-term positive outlook and prompt aggressive technical selling.

Conversely, a weaker-than-expected report would be enough to assist the USD/CAD pair to build on this week's strong rally from the vicinity of the 50-day SMA. Bulls, however, might wait for a sustained move beyond the 1.3075-1.3085 region before placing fresh bets. Spot prices would then aim to surpass an intermediate barrier near the 1.3155-1.3160 region and reclaim the 1.3200 mark before eventually climbing to the 1.3270 resistance zone.

Key Notes

  •   Canadian Jobs Preview: Forecasts from five major banks, fairly moderate employment growth in June

  •   USD/CAD Outlook: Bulls have the upper hand, US/Canadian jobs data awaited

  •   USD/CAD: A move to the 1.31-1.32 area is surely possible – 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.