When is the Canadian jobs report and how could it affect USD/CAD?

Canadian employment details overview

Statistics Canada is scheduled to publish the monthly jobs report for May later this Friday at 12:30 GMT. A temporary setback in the Canadian labour-market recovery is expected to have prolonged for the second straight month in May amid the reimposition of coronavirus restrictions in some provinces. Following the loss of 207.1K jobs in April, economists expect that the economy shed another 20K jobs in May and the unemployment rate rose to 8.2% from 8.1% in the previous month.

Meanwhile, analysts at RBC Economics were more downbeat and explained: “Canadian labour market report will show yet another step back in the employment recovery with employment expected to fall by 75K in May. Job losses will be concentrated in the hospitality and retail sectors due to the third wave of virus spread and containment measures. We look for the unemployment rate to inch higher to 8.4%. May job losses will build on April’s 207K drop to retrace half of the gains in February and March during the lull between the second and third waves.”

How could the data affect USD/CAD?

Ahead of the key release, the USD/CAD pair edged higher for the second consecutive session and move further away from multi-year lows touched earlier this week. The uptick was exclusively sponsored by a modest US dollar strength. That said, a surprisingly positive reading, along with a more hawkish BoC and bullish crude oil prices, should act as a tailwind for the loonie and cap gains for the major. That said, the data is more likely to be overshadowed by the simultaneous release of the US monthly jobs report (NFP), which should play a key role in influencing the major.

Key Notes

  •   Canadian Jobs Preview: Erratic figures set to shape USD/CAD's battle with 1.20

  •   Canadian Employment Preview: Forecasts from five major banks for May jobs report

  •   USD/CAD Outlook: Bulls eye NFP/Canadian jobs data for a fresh impetus

About the Unemployment Rate

The Unemployment Rate released by Statistics Canada is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labour market. As a result, a rise leads to weaken the Canadian economy. Normally, a decrease of the figure is seen as positive (or bullish) for the CAD, while an increase is seen as negative or bearish.