Statistics Canada is scheduled to publish the monthly jobs report for April later this Friday at 12:30 GMT. The Canadian labour-market recovery is expected to have suffered a temporary setback amid the reimposition of coronavirus restrictions in some provinces. Economists expect that the economy shed 175K jobs in April and the unemployment rate edged higher to 7.8% from 7.5% in March.
Meanwhile, analysts at Citibank were more downbeat about the report: “Following two months of strong job gains resulting from temporary re-openings, we expect job losses of 210K in April. The April employment report will cover the period from mid-March to mid-April when lockdowns were reintroduced.”
Despite expectations for a weaker reading, investors remain optimistic about a quick recovery once containment measures are lifted. This, along with a more hawkish BoC, should act as a tailwind for the loonie. Moreover, the report is more likely to be overshadowed by the simultaneous release of the US monthly jobs data (NFP), which should play a key role in influencing the USD/CAD pair.
Ahead of the key macro data, the pair managed to recover a part of the previous day’s sharp losses to the lowest level since September 2017 and was last seen trading with modest daily gains near the 1.2180 area. Any subsequent positive move is likely to confront resistance near the 1.2200 mark, above which a bout of short-covering has the potential to lift the pair further towards the 1.2265-70 horizontal resistance.
On the flip side, multi-year lows, around the 1.2145-40 region touched on Thursday, now seems to act as immediate support. Some follow-through selling will expose the 1.2100 round-figure mark, below which the pair seems all set to prolong its recent downward trajectory witnessed over the past one years or so. The next relevant support is pegged near September 2017 swing lows, around the 1.2070 region.
o Canadian Jobs Preview: US demand likely to outweigh covid concerns, push hiring, CAD higher
o Canadian Employment Preview: Forecasts from six major banks for April jobs report
o USD/CAD Outlook: Bears take a breather ahead of NFP/Canadian jobs report
The employment Change released by Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates 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.
The Unemployment Rate released by Statistics Canada is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labour market. As a result, a rise leads to weaken the Canadian economy. Normally, a decrease of the figure is seen as positive (or bullish) for the CAD, while an increase is seen as negative or bearish.
