USDCAD will be a function of broad USD variation and US Nonfarm Payrolls. A mix of weaker CAD data plus stronger US NFP will leave sticky resistance around 1.38 vulnerable, economists at TD Securities report.
On-consensus CAD jobs unlikely to do much for the Loonie
“An on-consensus print for jobs is unlikely to do much for the CAD. Instead, we think the focus will be on US payrolls. That said, CAD has been rather resilient on the crosses so an on-consensus print for payrolls will likely see that extend.”
“Payrolls data will be rather important for USDCAD as the USD leg has been very dominant in driving variation in the pair. But we see a limit to USD dips with a resolutely hawkish Powell. Slippage in Canadian data is likely to become magnified in USDCAD rather than on CAD crosses, but we think over time, this will reverse course as the acute pressures Canada faces are consumer related.”
“1.38 will be sticky resistance, but we think it will be liable to break on stronger US and weaker CAD data.”
See:
- NFP Preview: Forecasts from 10 major banks, further significant job growth
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Canadian Jobs Preview: Forecasts from five major banks, quite tepid jobs gain in October