CAD labour market preview: what to expect of USD/CAD

Statistics Canada will publish its labour market figures for the month of January later in the session, with consensus expecting the jobless rate to have stayed put at 6.9%, while the Employment Change is seen flat, reverting December’s nearly 54K gain.

In view of strategists at TD Securities, “Stronger hiring indicators have quelled concerns of a correction for the time being and the Markit PMI report noted that job creation in the manufacturing industry hit a six-month high in January. This suggests an upside risk to goods-producing employment, which has underperformed in recent months, while an expected pullback in professional services employment will weigh on the aggregate for the services sector. We also see scope for further gains in fulltime employment following the rebound in hiring last month”.

In the FX front, USD/CAD is looking to extend its sideline theme in the 1.3140 area, trying to put further distance from recent lows in sub-1.3000 levels seen in past sessions, always against the backdrop of quite a moderate recovery of the greenback. However, a positive surprise today could add extra wings to CAD although the strong support in the 1.3000 neighbourhood is expected to hold for the time being. On the upside, recent tops just above 1.3200 the figure emerge at the interim resistance.