Canadian dollar slides ahead of key labour data

The Canadian currency has a mixed day’s performance, but it gains since the US dollar is weakening. Due to lower US dollar flows earlier in the day, the USD/CAD pair dropped down below 1.3500. On Thursday, the Canadian dollar managed to gain some ground over its US counterpart. The USD/CAD pair fell below the 1.3500 handle as investors braced themselves for the US Nonfarm Payrolls (NFP) jobs report on Friday. As of this writing, the pair is down 0.31%, trading at 1.3471.

Canada has its own labour figures to be released on Friday. American markets will be switching to Daylight Savings Time this weekend, while Canada will be largely absent from the economic calendar with strictly low-tier data on offer next week.

However, plenty of US data will arrive to drive the markets, with February’s US Consumer Price Index (CPI) inflation slated for next Tuesday. Canada’s MoM Building Permits jumped to a seven-month high of 13.5% in January, well above the 5.5% forecast and recovering from the previous month’s -11.5% decline (which was revised upward from -14.0%).

US Initial Jobless Claims for the week ended March 1 printed slightly above expectations, coming in at 217K versus the forecast 215K, while the previous week saw a revision to 217K from 215K. Initial Jobless Claims came in above the four-week average of 212.25K.

US Nonfarm Productivity in the fourth quarter held steady at 3.2% compared to the forecast of a tick lower to 3.1%. US Q4 Unit Labour Costs ticked down to 0.4% from the previous 0.5%, missing the forecasted uptick to 0.6%.

(Fed Chair Jerome Powell testifies before the US Senate Banking Committee in the second of a two-day Q&A about the Fed’s Semi-Annual Monetary Policy Report. Canada’s Unemployment Rate is expected to tick higher from 5.7% to 5.8% on Friday.

Canadian Net Change in Employment in February is forecast to print at 20K versus the previous month’s 37.3K. Friday’s US NFP print is expected to come in at 200K for February, down from January’s 11-month peak of 353K.

The Canadian Dollar rose 3% against the US Dollar, but is moderately softer in the forex market, losing 5% against the Japanese Yen, Australian Dollar, New Zealand Dollar, and Euro.

USD/CAD reached a near-term floor at 1.3500 on Wednesday, with Thursday’s US Dollar-bearish flows pushing it toward 1.3460. The is down by a full percent from the week’s peak at 1.3605. Thursday’s decline brings the pair back into the 200-day Simple Moving Average at 1.3477, with the immediate technical floor at the last swing low toward 1.3350.