Overview of employment details in Canada
Statistics Canada is due to release April’s monthly jobs report later this Friday at 12:30 GMT. The Canadian economy is expected to have added 55,000 jobs in the month under review, down from the 72,500 gain reported in March. Meanwhile, the jobless rate is expected to drop from 5.3% to 5.2% in April.
NBF analysts offered a brief overview of the report and explained, “Job creation should have continued at a solid pace during the month, reflecting a strong economy. That said, the number of jobs added may have declined after two extremely strong months. Our call is for a gain of 25K. Such an improvement in the labor market would leave the unemployment rate unchanged, assuming that the participation rate remains at 65.4%.
How could the data affect USD/CAD?
Ahead of the key release, rising crude oil prices supported the commodity-linked loonie and acted as a headwind for the USD/CAD pair amid a modest pullback in the US dollar from a two-higher decades. The data is likely to be overshadowed by the simultaneous release of the US NFP report, although any significant divergence from the expected readings could still inject some volatility around the pair.
From current levels, any significant upside should be met with strong resistance near the 1.2900 mark. Some follow-up buying should pave the way for further gains and carry spot prices to the December 2021 high around the 1.2960-1.2965 area en route to the key psychological mark of 1.3000.
On the other hand, the round figure of 1.2800 now seems to protect the immediate decline ahead of the 1.2780-1.2775 region. The decline could be seen as a buying opportunity around the 1.2750-1.2745 area. This, in turn, should help limit the decline near the 1.2715-1.2710 area, or the weekly low hit on Thursday, which is closely followed by the 1.2700 round number mark.
• Canadian Employment Snapshot: Forecasts from Five Big Banks, Struggling with Labor Shortages
• USD/CAD forecast: bulls expect a break in the descending trend line, US and Canadian jobs data in focus
• USD/CAD: employment in Canada should largely support the loonie – ING
About job change
The change in employment published by Statistics Canada is a measure of the change in the number of people employed in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending that drives 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 published by Statistics Canada is the number of unemployed persons divided by the total civilian labor force. It is a leading indicator of the Canadian economy. If the rate is rising, it indicates a lack of expansion in the Canadian labor market. Consequently, a rise leads to a weakening of the Canadian economy. Normally, a decrease in the figure is seen as positive (or bullish) for the CAD, while an increase is seen as negative or bearish.