CAD holds range ahead of employment data cue for the BoC – Scotiabank

The Canadian Dollar (CAD) is a little softer but still holding well within recent ranges, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Weak trend momentum supports more sideways trading

“The street’s consensus for the Canadian jobs report is the standard +25k gain for November (note Scotia at +20K), with a nudge up in the unemployment rate to 6.6%, from 6.5% in October. Under the hood of October’s 14.5k gain in jobs, the details showed a solid rise in full-time work plus still elevated wages (4.7% Y/Y).”

“The loosening in the labour market implied by the steady rise in the unemployment rate is what BoC policymakers are focused on, however, and the November data is expected to equal the recent cycle high of 6.6% seen in August. Soft data will raise market expectations that the BoC will opt for a more aggressive rate cut next week.”

“Swaps are pricing in around 40bps of easing risk now. Range trading persists. Weak trend momentum supports more sideways trading between support at 1.3890/00 and resistance at 1.4090/00 in the short run.”