USD/CAD to edge lower toward 1.26 into year-end – ING
|Canadian employment figures are due out on Friday. Labour market is set to keep pressuring the Bank of Canada, as a sharp uptick in wages is expected, proving persistent inflation. In the view of economists at ING, the USDC/AD pair could drop to 1.26 by year-end.
Labour market gains in November with another 30K jobs added
“The pace of hiring was understandably slower in October following the very strong summer gains, and markets are likely expecting another read around +30K. A greater focus is being put on wage growth: more indications of upward pressure on wages will easily fit the narrative that inflation in Canada should prove quite persistent.”
“The BoC is set to continue facing the pressure from domestic data although the developments on the virus side naturally hold the key for the policy response in the near-term.”
“Given the high beta to sentiment and commodities, any view on CAD is strictly dependent on incoming news about the danger associated with the new variant, but if we exclude a return to draconian measures in highly-vaccinated communities, we think USD/CAD can gradually decline towards 1.2600 into year-end.”
See – Canadian Jobs Preview: Forecasts from five major banks, labour market to keep pressuring the BoC
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