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 January later this Friday at 13:30 GMT. Consensus estimates point to another loss of 47.5K jobs in January. This comes on the back of a negative reading in December and could push the unemployment rate higher to 8.9% from 8.6% previous.
According to analysts at TDS: “Job losses should accelerate to 90K in January, reflecting more stringent lockdowns imposed across Eastern Canada. Look for a concentrated impact on services with a large drag from retail and other targeted industries, and a larger decline for part-time workers. Hours worked will give insight into growth conditions for January while unemployment should push north of 9%.”
How could the data affect USD/CAD?
The Canadian employment details will be accompanied, rather overshadowed by the US NFP report. That said, any meaningful divergence from the expected reading might still infuse some volatility and produce some meaningful trading opportunities around the USD/CAD pair. As Yohay Elam, FXStreet's own analyst writes: “There is a good case for Canada's job figures to have beaten estimates in January and the loonie has room to rise. However, US Nonfarm Payrolls may prompt choppy price action.”
Meanwhile, Joseph Trevisani, FXStreet's senior analyst offered a brief technical outlook for the major: “With the recovery of almost two figures from the1.2632 low on January 21 the USD/CAD has developed some balance in the support and resistance structure. The break of the down channel and the 21-day moving average on Wednesday is technical and requires considerable confirmation before it begins to approach a reversal. Support lines have references back to the middle of December and offer reasonable strength. Though the technical outlook is more even than it has been in many weeks, eleven months of temporary bounces followed by a resumed decline has to be throughly debunked as the scenario before the USD/CAD bias is higher.”
Key Notes
• Canadian Jobs Preview: CAD ready for a comeback? Three reasons for a positive surprise
• Canadian Employment Preview: Forecast from six major banks for January jobs report
• USD/CAD consolidated in a range above 1.2800, US/Canadian jobs report awaited
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.