Mining & Metals
Canadian Dollar Eyes Friday's Domestic Jobs Data, but US Payrolls Likely to Be Key Catalyst, ING Says
Friday's Canadian employment report will be in focus for the loonie, but the simultaneous release of US nonfarm payrolls is likely to remain the key driver of USD/CAD, according to ING Economics in a note.Historically, USD/CAD has tended to respond more strongly to US labor market data when both reports are released simultaneously, wrote ING FX Strategist Francesco Pesole in the note.A softer US payrolls outcome has typically been more negative for the Canadian dollar than for other commodity currencies, given the strong correlation between US and Canadian rate expectations, added Pesole.Canada will release the Labour Force Survey (LFS) for July at 8:30 a.m. ET Friday.The consensus is for another solid labor market report in July, with employment forecast to increase by 20,000, marking a third consecutive monthly gain, said the bank. The unemployment rate is expected to hold steady at 6.5% after easing in June.ING maintains its USD/CAD outlook, expecting the pair to trend lower toward 1.38 by year-end, largely reflecting a weaker US dollar backdrop. Nevertheless, the bank continues to see the Canadian dollar lagging most G10 currencies over the period.
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