The Bank of Canada delivered a widely expected 25bp rate cut on Wednesday. The BoC event did not significantly move markets, and the USD/CAD drop shortly after the announcement was mainly due to weak US JOLT figures, notes Francesco Pesole, FX Strategist at ING.
NFP may have a bigger impact on USD/CAD than Canadian payrolls
“Today, Canada releases employment figures at the same time as the US. The consensus for Canadian payrolls is 25k, in line with recent months. The fact that the consensus has not been adjusted downwards after two negative figures tells us that it is not a really reliable benchmark for expectations.”
“Incidentally, watching the unemployment figure is probably more informative at this stage. We expect, in line with consensus, a rise from 6.4% to 6.5%. Remember, this was 5.7% in January, and another rise would support market pricing for more consecutive BoC cuts.”
“US payrolls may have a bigger impact on USD/CAD than Canadian payrolls. However, we continue to believe that the pairs look increasingly cheaper as they approach the 1.345 mark. Ultimately, the Canadian dollar should underperform most of its high-beta peers if weak US macroeconomic news is confirmed.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
