Canada releases jobs figures for February today. Economists at ING analyze Loonie’s outlook ahead of the employment report.
Loonie still looks at the US more than Canada
Expectations are for a respectable 20K employment print, with the unemployment rate expected to nudge higher from 5.7% to 5.8%.
The implications for the Canadian Dollar should not be material unless we see a big surprise in either direction. Both the Loonie and Bank of Canada rate expectations have followed very closely US data dynamics and we think that today’s US payrolls should have a bigger say in the short-term direction of USD/CAD.
A USD decline should see the Loonie lag other high-beta/commodity currencies, but can still put gradual pressure on USD/CAD, which we expect to break below 1.3000 by 2H24.
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