CAD jobs report: what to expect of USD/CAD

Canadian labour market figures are due later in the NA session. Prior surveys expect the unemployment rate to have stayed put at 6.9% during last month, while the Net Change in Employment will look to improve from July’s 31.2K drop.

In view of ‘Rates, FX and Commodities Research’ at TD Securities, “While our above-consensus projection indicates a decent recovery in job growth, the report offers limited upside to the wider economic outlook as downside risks linger. Following the Bank of Canada’s dovish turn at its September meeting, more emphasis will be placed on a downside miss”.

Regarding FX, USD/CAD continues to rebound from earlier weekly lows in the 1.2830/25 band today, back by a better tone in the greenback while the current retracement of crude oil prices is sending the barrel of West Texas Intermediate to test lows near the $47.00 mark, removing support from CAD at the same time. In case the upside gathers further impulse, the 1.3000 area (psychological level, 55-day sma and the base of the 4-month rising channel) emerges at the initial hurdle ahead of recent ‘double tops’ in the mid-1.3100s.