USD/CAD: Loonie to shrug off employment data barring a big surprise in either direction – ING

Canada releases jobs figures for February today. Economists at ING analyze Loonie’s outlook ahead of the employment report.

Loonie still looks at the US more than Canada

Expectations are for a respectable 20K employment print, with the unemployment rate expected to nudge higher from 5.7% to 5.8%.

The implications for the Canadian Dollar should not be material unless we see a big surprise in either direction. Both the Loonie and Bank of Canada rate expectations have followed very closely US data dynamics and we think that today’s US payrolls should have a bigger say in the short-term direction of USD/CAD. 

A USD decline should see the Loonie lag other high-beta/commodity currencies, but can still put gradual pressure on USD/CAD, which we expect to break below 1.3000 by 2H24.