Scope for CAD underperformance to come to a tactical end – TDS

The Canadian labour market added another 10K jobs in November to match the market consensus. Economists at TD Securities think there is scope for CAD underperformance to come to an end, at least tactically.

A bang-on consensus expectations result does little for the CAD

“The November employment report showed job growth slowing to 10.1K, matching the market consensus, as weaker labour force participation helped pull the unemployment rate to 5.1%.”

“Today's report fits with our call for the Bank of Canada to hike by 25 bps next week, as there was little in the report to support a more aggressive move.”

“This number does little to impact the CAD. That said, we think there is scope for CAD underperformance to come to a tactical end on the crosses following much stronger US Nonfarm Payrolls and wage data.”