Loonie To Pare Early Losses Against Aussie On Employment Data

Heading to the culmination of the week’s trades between the two commodity dollars, the Canadian dollar is anticipated to pare earlier losses against the Australian dollar. The aussie has gained following the Cash Rate announcement earlier this week, as well as the jobs data from the Australian Bureau of Statistics yesterday.

Risk sentiment during the Asian trades was also underpinned by signs that China's economy is stabilizing. The story could be reversed though come the New York session, as investors await the US nonfarm payrolls data due later in the day. The Canadian job market has its upsides as well.

North America releases its labor market figures today, and has investors keeping an eye on the upcoming market data. Market participanst will be looking to the latest nonfarm payrolls numbers out of the US, where economists estimate that Superstorm Sandy damaged employment growth.

Though this could likely hurt risk sentiment somewhat, it also highlights the buoyant Employment Change figure from Statistics Canada. Economists forecast that data today will show the Maple Leaf gained 11,300 jobs in November, a modest increase from the 1,800 gain the prior month. The Unemployment Rate is expected to remain at 7.4 percent.

Meanwhile, data released earlier today by the Australian Bureau of Statistics shows that the nation’s trade deficit widened in October. Imports outpaced exports by AUD 2.09 Billion, compared with a revised AUD 1.42 Billion deficit in September. The deficit was less than what analysts pictured, as exports withstood a slower global economy and capital goods purchases increased. However, if we add this to the earlier report by the Australian Industry Group that the Performance of Construction Index remained in a contraction phase, these economic data could bear on the Aussie.

A sell bias is recommended for the AUD/CAD today. Be cautious still of likely technical price corrections.