Canada Employment Change July Preview: Loonie awaits a weak US NFP

Statistics Canada reports on the July net change in employment are due at 12:30 GMT. Job rolls are expected to add 400,000 workers in July while the unemployment rate is forecast to drop to 11% from 12.3%. Impact on the loonie moves relies on the US NFP report rather than Canadian data. USD/CAD could move lower if the US adds less than the 1.6 million jobs expected.

Key quotes

“National payrolls are forecast to expand by 400,000. The unemployment rate is expected to drop to 11% from 12.3% and the participation rate should rise to 65.4% from 63.8% in June.”

“The record of a stronger recovery in the Canadian labor market is likely to continue in July. The pertinent question for the USD/CAD is the state of the US job market. If the forecasts are on target at 1.6 million or less the USD weakness will continue. If NFP is stronger than predictions the degree of dollar impact will equate closely to the size of the payroll number.”