Canada Employment Report Preview (JUL 2024)
Canada Employment
The update to Canada’s Employment report showed a 1.4K contract in June versus forecasts for a 22.5K rise, while the jobless rate widened to 6.4% from 6.2% during the same period.
Canada Economic Calendar – July 5, 2024
A deeper look at the report showed ‘there were 1.4 million unemployed people in June 2024, an increase of 42,000 (+3.1%) from the previous month,’ while Average Hourly Wages climbed to 5.6% From 5.2% in May.
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USD/CAD Chart – 15 Minute
Chart Prepared by David Song, Strategist; USD/CAD Price on TradingView
The initial reaction to Canada’s employment report was rather limited as USD/CAD was little changed following the release. Nevertheless, USD/CAD trade higher during the session to close the day at 1.3653.
Looking ahead, Canada is projected to add 22.5K jobs in July following the 1.4K contraction the month prior, while the jobless rate is expected to increase to 6.5% from 6.4% during the same period.
A rebound in Canada employment may push the Bank of Canada (BoC) to the sidelines following the back-to-back rate cuts, and a positive development may spark a bullish reaction in the Canadian Dollar as raises the central bank’s scope to retain the current policy at the next meeting on September 4.
However, another decline in Canada Employment may encourage Governor Tiff Macklem and Co. to pursue a more accommodative policy, and signs of a weakening labor market may produce headwinds for the Canadian Dollar as it fuels speculation for lower interest rates.
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--- Written by David Song, Strategist
Follow on Twitter at @DavidJSong
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