USD/CAD Trading Insights: Key Levels to Watch as Canadian Job Data Looms

11/08/2024

1 minute read

2024.11.08 12:42

The has steadied on Friday after a roller-coaster week. In the European session, USD/CAD is trading at 1.3889 at the time of writing, up 0.22% on the day.

Canada’s Job Growth Expected to Slow

With the tough battle against inflation largely won, the Bank of Canada has been a leader in the easing cycle among central banks, having cut rates three times this year. BoC policymakers are still keeping an eye on inflation but employment data is also in focus. The labor market has performed well despite high interest rates and a sluggish economy and the BoC needs the labor market to remain strong in order to ease the economy into a ‘soft landing’ and avoid a recession.

The September employment report was impressive as job growth jumped by 46.7 thousand, which was much higher than expectations. The October release is expected at 25 thousand and the unemployment rate is projected to creep up to 6.6% from 6.5%. If the forecasts prove accurate, it would point to a gradually weakening labor market, which would allow the BoC to continue cutting rates in modest increments of 25 basis points. The BoC holds its last rate meeting of the year on Dec. 11.

The the benchmark rate by 25-basis points on Wednesday. This is the second cut in the easing cycle after an oversized 50-bp chop in September. The move was widely expected and overshadowed by Donald Trump’s decisive and surprisingly easy win in the US election. The Fed plans to continue trimming rates but the size of the cuts will depend on the health of the economy, with employment and inflation data being the crucial factors which will determine the Fed’s rate path. USD/CAD-Daily Chart