Canadian job growth slowed to 245.8K in August, as expected by the market consensus. Meanwhile, USD/CAD is set to take its cue from the broader USD tone and US jobs report. Economists at TD Securities are mindful of the 1.3130 topside pivot.
Key quotes
“The Canadian economy added back another 245.8K jobs in August, roughly in line with the market consensus (250K) and slightly stronger than the 225K we were looking for, bringing the total recovery to 1.9M of the 3.0M jobs that were lost over March/April.”
“Details were upbeat, with full-time positions accounting for 206k of new jobs and hours worked up 2.9%. This pushed the unemployment rate to 10.2% while labour force participation edged higher to 64.6%.”
“This report confirms that the economic recovery remains on track after the historic contraction in Q1, but should not have any wider implications for fiscal or monetary policy. The Bank of Canada will have to acknowledge a stronger growth backdrop next week but this is inconsequential with the amount of slack that remains.”
“We look to the 1.3130 pivot in USD/CAD to be instrumental; this coincides with daily downtrend resistance established from the March highs. A convincing break of this level could open up more topside towards 1.3240/50.”
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