Canadian jobs preview: Long-lasting volatility provides opportunities– Three USD/CAD scenarios

  • Canada is expected to report an increase of only around 10,000 jobs in September.
  • The low bar opens the door to an upside surprise that may benefit the loonie.
  • FXStreet's volatility tools show that traders have time to digest the data and take advantage of any move.

Finding a job Canada has been easier than many expected in 2019 – and the employment report for September may repeat recent history.  The Canadian jobs figures are not published alongside the US Non-Farm Payrolls, allowing the data to move USD/CAD on its own.

Scenarios: higher chances of an upside surprise

The FXStreet economic calendar is showing that actual employment change in Canada has beaten expectations in seven out of nine labor reports so far in 2019. Here are expectations vs. reality, dating back to mid-2016. 

Canadian jobs reports actual versus expectations

Moreover, expectations stand at an increase of 10,000 jobs, modest in absolute terms and also when looking at August's increase – 81,100 positions. While the economy likely gained fewer posts than in the previous month, a sharp slowdown seems somewhat over-cautious. 

Therefore, the main scenario is for the actual figure to beat estimates – sending the Canadian Dollar higher. An increase of 20,000 jobs or more should be sufficient for an upwards move in the loonie. 

In case Canada lost jobs last month, the loonie may extend its losses – driven so far by concerns about trade and falling oil prices.

Other factors that may influence the loonie

And in case Canada gained up to 20,000 positions, other factors may come into play. The Unemployment Rate stands at 5.7% and estimates stand at a repeat of that figure. Any deviation is dependent also on the Participation Rate – which is also projected to stay put at 65.8%. In comparison, the US jobless rate is only 3.5%, but participation is significantly lower at 63.2%.

If Canada's unemployment rate and participation rise at the same time, markets will likely regard it is good news – as it reflects more people drawn into the workforce. However, a drop in the jobless rate that is a result of fewer people participating in the labor force is adverse news. 

The wildcard remains Average Hourly Wages. Annual salary growth accelerated to 3.78% in August. The rise in income is seen as a sign of a tight labor market and boosts the loonie. There are no expectations for September's wage numbers.

Level playing field for USD/CAD traders

The market reaction to the Canadian jobs report is relatively slow. USD/CAD tends to jump in the right direction – falling on robust Canadian data and rising on weak figures. Later on, it tends to advance gradually along with the trend. This behavior allows retail traders to digest the figures and jump on the trade.

FXStreet's volatility tools are showing that in the past few months, USD/CAD price action in the four hours following the publication has exceeded movements in the first 15 minutes. The graph below shows how traders can still join the rally or sell-off after reading all the figures with cool heads.

USD CAD volatility around Canadian jobs reports late reaction


Low expectations and a series of better-than-expected headline job figures imply higher chances that Canada's job growth easily surpasses 10,000 job gains expected. In that case, the Canadian dollar may rise. If the nation lost positions in September, the loonie has room to fall. If the actual figures meet expectations, other job figures will likely play a role in determining the trend. The USD/CAD reaction is slow and price action lasts longer, allowing retail traders a level-playing field with the big investors. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD challenges weekly lows after mixed Durable Goods Orders

US Durable Goods Orders were up a measly 0.4% in August, missing expectations of 1.0%, although Nondefense Capital Goods Orders ex Aircraft jumped 1.8%. Equities bounce from lows, but the dollar maintains its strength.


GBP/USD loses 1.2700 as the dollar keeps rallying

GBP/USD approaches its weekly low at 1.2674 as demand for the American currency extends into the final trading session of the week. Hopes for a UK trade deal with the EU doing little for Sterling.


Gold: Downside appears more compelling in the NFP week ahead

Gold (XAU/USD) shed about 4.5% in the past week, delivering a weekly closing below the August month low of $1863. The yellow metal booked the first weekly loss in three, with the risks skewed to the downside in the US Non-Farm Payrolls (NFP) week ahead.  

Gold News

Breaking: ​​​​​​​The IRS makes it hard to pretend you don’t have Bitcoin

The cryptocurrency holders might have a hard time trying to hide their Bitcoins or other digital assets. IRS considers changing the standard 1040 form by including a bold question on the front page:  At any time during 2020, did you sell, receive, send, exchange, or otherwise acquire any financial interest in any virtual currency? 

Read more

WTI moves back to flat and once again trades above $40 per barrel

It has been a mixed Friday for WTI as the price is moving sideways heading into the weekend. All of the excitement was last week when the OPEC+ JMMC decided to keep output levels at their current rate until December.

Oil News

Forex Majors