- Canada to release July employment report on Friday
- US nonfarm payrolls expected to dip to 200,000 on Friday
- There is resistance at 1.3288 and 1.3324
- 1.3182 and 1.3112 are providing support
The Canadian dollar is almost unchanged on Monday, trading at 1.3357 in the North American session.
Canada’s job numbers are expected to remain solid
Canada’s releases the July employment report on Friday and June’s stellar data will be hard to beat. The economy created 59,900 jobs in June, driven by a massive gain of 109,600 full-time jobs (part-time jobs fell by 49,800). The consensus estimate for July stands at 21,100. The unemployment rate is expected to nudge up to 5.5%, compared to 5.4% in June.
Unless the employment report delivers a huge surprise, it is unlikely to have much effect on the USD/CAD. The Bank of Canada doesn’t meet until September 14th and will be keeping a close eye on employment and inflation reports ahead of the rate decision.
Inflation remains the central bank’s top priority and the minutes of the July meeting, at which the BoC hiked by 0.25%, indicated that Bank members attributed high inflation to the tight labor market as well as higher-than-expected consumption. The BoC has raised the cash rate to 5.0% and has not ruled out further rate increases.
In the US, unemployment claims rose slightly to 227,000, up from 221,000. Investors are keeping a close eye on Friday’s nonfarm payrolls for July, which is expected to dip to 200,000, down from 209,000 in June. The ADP employment report showed a massive gain of 324,000, raising speculation that nonfarm payrolls could follow suit and force the Fed to be more hawkish.
The same thing happened in July when ADP sizzled with a gain of 455,000 and there was talk of a banner nonfarm payrolls report. In the end, nonfarm payrolls fell sharply and the hot ADP report was quickly forgotten. Will the NFP come in around 200,000 as forecast or will it follow the ADP and soar higher?
USD/CAD Technical