USD/CAD: Firm Canadian Employment data will lift the Loonie – Scotiabank

The CAD has perked up a little to retest the low 1.33 zone ahead of the May employment report. Economists at Scotiabank discuss how data could impact the Loonie.

Significantly weaker data will soften the CAD somewhat

Canadian jobs data is expected to show a solid gain (21.3K consensus) for May, with the unemployment rate ticking a tenth higher to 5.1%. Wages are called a tenth lower to 5.1% YoY in the month. Still relatively tight labour markets and wage growth that remains highly incompatible with the Bank’s inflation goals will support the idea that this week’s hike may still not be the last in the cycle. 

Firm data will lift the CAD; significantly weaker data will soften the CAD somewhat but minor USD gains still look a decent selling opportunity. 

See – Canada Employment Preview: Forecasts from five major banks, tight labour market