USD/CAD was down by 4 pips (-0.03%) to 1.3403 with a daily range of 1.3378 to 1.3414 as of 9.30am GMT.
USD/CAD has barely moved in the past two days with the it again closing near where it opened on Thursday. The exchange rate is unmoved on the week at just +0.04% higher.
Canadian unemployment rate expected to rise to 5.6% in February
Of all the major currencies to benefit from dollar-weakness the Loonie is bottom of the pile following this week’s Bank of Canada half a percentage point cut to Canadian interest rates. Tensions between OPEC and Russia about the proposed 1.5M barrels per day cut to oil output among oil producing nations is pulling the price of oil lower. The Canadian dollar tends to correlate positively with oil prices because of Canada’ reliance on its energy exports.
The Canadian unemployment rate is expected to rise to 5.6% in February from 5.5% with 10,000 new Canadian jobs created, down from the 34,500 created in January. There had been similar forecasts for January which turned out to be a big positive surprise as the economy benefited from easing trade tensions between the US and China. Since then of course the coronavirus is likely to have slowed activity but it isn’t expected to reflect particularly in numbers for February.
The US dollar
Overall market sentiment looks bad on the morning before the release of the US non-farm payrolls report. Good numbers could easily be dismissed as outdated because they won’t account for the coronavirus. While bad numbers mean the economy is in a poorer position to cope with the outbreak.
Expectations are for 175,000 American jobs to have been created in February, down from the 225,000 in January. The unemployment rate should remain steady at 3.6% and average hourly earnings rise by 0.3%, up from 0.2% m/m. Hiring for the census should have been a boost while the shutdown at the Boeing 737 Max factory will have been a drag.