How Canadian Employment Fluctuation Influences The USDCAD Rate

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: October 30, 2024

Employment change is one of the most certain indicators which can be used to determine the movement of currency couples. In this case we are talking about the USD/CAD couple which is greatly influenced by the Unemployment Rate and Employment Change in Canada.

The latest figures were released in April and showed a drop of the staggering 54.5 thousand – something that wasn’t expected by the markets. The initial predictions showed that the markets were expecting an increase of at least 6.8 thousand, so the massive drop definitely shocked them. When we take a closer look at the May forecast, we see the employment change at 13.5 thousand, but this is not as much as the markets anticipated. So, how long will it take the Employment Change to stabilize and meet the markets’ expectations?

On the other hand we have the employment rates in the US which definitely got better in recent weeks. The improving picture in the US will also have a positive impact on the Canadian economy, so it is very likely that the loonie will soon meet the expectations of most specialists. Other signs that support this argument is the price of oil which is also in favor of the Canadian currency.

Latest Technical Levels: 1.0125, 1.01, 1.0050, 1.02, 1.00, 0.9950, and 99.10.

These are the five possible scenarios which the employment change may follow:

1. 10K to 17K. This is the most expected outcome and it will have a slight impact on the movement of the USD/CAD, but won’t break any levels

2. 17.1K to 20K. This scenario will certainly surpass the expectations of markets and will help the currency pair beat one of level of support.

3. Above 20K. If the employment figures rise so rapidly, the USD/CAD pair may even break two levels of support.

4. 6K to 9.9K. These figures will keep the employment rate below the expectations of the market, and the USD/CAD will go upward, threatening at least one resistance level.

5. Below 6K. Figures so poor will significantly shake the confidence of investors, so it won’t be surprising if the currency pair breaks two levels of resistance.

Related News