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Canada’s latest employment figures, set for release on Friday at 17:30 Dubai Time, are forecasted to show an increase of approximately 28,000 jobs, with the unemployment rate expected to hold steady at 6.6%. This data release will serve as a significant indicator for the Bank of Canada’s (BoC) upcoming policy decisions amidst ongoing market volatility.
The USD/CAD pair has eased from its recent high of 1.3958, trading below the 1.3900 level on Thursday. However, any additional downside may be limited if renewed demand for the USD emerges, driven by “Trump trades” following Republican election victories, alongside expectations for a smaller rate cut from the Federal Reserve.
Canada’s Dollar, closely tied to oil prices due to its status as a major oil exporter to the U.S., has found support as WTI prices rose toward $72.00 per barrel. Any fluctuation in oil prices can significantly impact the CAD’s movement in relation to USD.
The BoC’s recent 50-basis-point rate cut in October has brought the policy rate to 3.75%. However, meeting notes reveal that officials remain cautious about implementing large rate cuts, indicating that future decisions will rely heavily on incoming data.
Friday’s employment data will be key in shaping the BoC’s next rate decision. Weak figures could prompt further cuts at the current pace, while strong results may strengthen the CAD and reduce the likelihood of aggressive cuts in upcoming meetings.
This report will provide insights into Canada’s economic resilience and guide the BoC’s response amid evolving market conditions.
Technical Analysis
USD/CAD has been forming higher lows and higher highs, indicating that the uptrend may still be strong. Price corrected as it formed a high around 1.3958, moving below the pivot line and breaching support. Positive data could help the CAD regain ground which would mean additional bearish pressure on the pair. In the alternative potential scenario, weak data could help the currency pair regain ground back above the pivot line.
