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US and Canadian dollar traders brace for employment data

business-articlesUS and Canadian dollar traders brace for employment data
  • Pound vulnerable to Brexit uncertainty
  • Canadian dollar weakness likely on softer participation rate
  • Jobs data set to boost US dollar
 
 
Brexit uncertainty to keep pound under pressure
 
Brexit developments look set to provoke further volatility for GBP exchange rates over the course of the day.
 
With only a week left before the updated Brexit deadline a continued lack of progress towards a tangible deal could see the pound remain on the back foot.
 
Unless markets see signs that Theresa May could reach a deal with the Labour leadership the mood towards the pound is unlikely to see any material improvement today.
 
Even so, after a recent run of losses GBP exchange rates could find a temporary floor today in the absence of any dramatic developments.
 
 
Weaker employment data could dent Canadian dollar
 
A solid uptick in the Ivey PMI encouraged the Canadian dollar to strengthen yesterday, with confidence in the outlook of the economy improving.
 
However, the mood towards the Canadian dollar could easily sour this afternoon if March’s raft of unemployment data fails to impress.
 
Forecasts point towards a decline in the participation rate on the month, indicating that fewer Canadians are now active within the labour market.
 
Any softening in wage growth could also weigh heavily on CAD exchange rates as markets continue to weigh up the odds of further Bank of Canada (BoC) dovishness.
 
 
US dollar strengthens ahead of jobs data
 
In the wake of yesterday’s better-than-expected jobless claims figures investors are looking for a stronger showing from the latest non-farm payrolls report.
 
Investors expect to see the headline change in non-farm payrolls figure strengthen sharply on the month, rising to 180,000 after February’s lacklustre report.
 
As long as the employment data shows a solid improvement on the month the US dollar is likely to find fresh support today.
 
However, any decline in March’s average earnings data could put a dampener on USD exchange rates ahead of the weekend.
 
 
Upcoming Data:
 
Friday, 5th April 2019
13:30 CAD Unemployment Rate
13:30 USD Change in Non-Farm Payrolls
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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