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 September later this Friday at 12:30 GMT. According to the consensus estimates, the number of employed people is expected to have risen by 10K during the reported month as compared to a massive increase of 81.1K in the previous month, while the unemployment rate is expected to hold steady at 5.7%.

In contrast, the analysts at TD Securities forecast an addition of 10K jobs last month, as explained here, “details should prove largely downbeat, with private employment projected to contract on the month while the unemployment rate is expected to edge higher by 0.1pp to 5.8% (market: 5.7%). Wage growth should be the one bright spot, with average hourly earnings forecast to hold at 3.8% y/y.”

How could the data affect USD/CAD?

“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,” FXStreet’s Senior Analyst, Yohay Elam, notes.

On an upbeat headline reading, USD/CAD could extend losses and test the 100-DMA support at 1.3243. A break below the last would open the floors towards the 1.32 handle.

Should the jobs data disappoint, the CAD bears will be offered some reprieve, as the pair could attempt a bounce to 1.3305 (5-DMA), above which the next resistances are aligned at 1.3350 (intermittent tops) and 1.3384 (Sept 3 high).

However, the reaction to the data is likely to be limited, as the sentiment around the spot will be primarily driven by the trade-related developments.  

Key Notes

Canada: Labour market data in focus – NBF

USD/CAD struggles near weekly lows, below 1.3300 mark amid rising Oil prices

USD/CAD Analysis: breaches channel pattern

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 labor force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labor 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.