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 March later this Thursday at 12:30 GMT. The Canadian economy is anticipated to have added 12K jobs during the reported month, down from February's reading of 21.8K. Moreover, the unemployment rate is anticipated to edge higher to 5.1% from 5.0% in the previous month.

Analysts at Citi Bank offer a brief preview of the key macro data and explain: “After a few months of very strong employment gains, we expect a modest 10K drop in employment in the labor force survey in March, although with risks tilted to the upside due to strong population growth from immigration. An eventual contraction in activity later this year alongside slowing in the US which should result in job losses, but even in this scenario, the rise in unemployment could be relatively muted. Expectation for modest job loss in March would imply an increase in the unemployment rate to a still-low 5.2%.”

How could the data affect USD/CAD?

Ahead of the crucial employment details, the USD/CAD pair is seen trading with a positive bias for the third successive day and draws support from a combination of factors. A softer tone around Crude Oil prices undermines the commodity-linked Loonie, which, along with a modest US Dollar (USD), uptick acts as a tailwind for the major.

Any disappointment from the Canadian employment details could further weigh on the domestic currency and provide an additional boost to the USD/CAD pair. Conversely, stronger data might lend support to the Canadian Dollar and cap the upside for the major. The immediate market reaction, however, is more likely to be limited as the focus remains glued to the closely-watched US monthly jobs data - popularly known as NFP.

Valeria Bednarik, Chief Analyst at FXStreet, offers a brief technical outlook for the USD/CAD pair and writes: “Technical readings in the daily chart suggest the upward potential remains limited, as indicators have barely recovered from near oversold readings, lacking strength enough to confirm another leg north. Furthermore, USD/CAD develops below a directionless 100 Simple Moving Average (SMA) at 1.3520, while the 20 SMA gains bearish traction far above the longer one.”

Valeria further outlines important technical levels to trade the USD/CAD pair: “A steeper decline could be expected on a break below the 1.3400 threshold, with market players targeting then the 1.3250/70 region, where the pair bottomed multiple times between November and February. Gains beyond 1.3520, on the other hand, could see the pair testing the 1.3600 mark.”

Key Notes

  •  Canada Employment Preview: Modest gain anticipated, but a surprise not off the table

  •  Canadian Jobs Preview: Forecasts from four major banks, employment may suffer a bit of retreat

  •  USD/CAD Forecast: 100 DMA holds the key ahead of Canadian jobs data

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.