– US expected to have added 200,000 jobs in November, Unemployment rate 4.2%.
– Canada forecast to have gained 25,000 jobs vs 14,500 in October.
– US dollar idling ahead of key data.
USDCAD: open 1.4041, overnight range,1.4019-1.4045, close 1.4025, WTI $67.74, Gold, $2634.34
The Canadian dollar drifted aimlessly in another uneventful overnight session. Traders were content to sit on the sidelines until the release of the November nonfarm payrolls report from the US. Economists and analysts are unanimous in the view that the November nonfarm payrolls report will show a significant rebound from the storm and strike-battered results in October.
The consensus forecast is for a gain of 200,000 jobs (October 12,000). That result would ensure the Fed cuts rates 25 bps on December 18. On the other hand, a sharply higher-than-expected result, say over 300,000, would encourage the FOMC to leave monetary policy unchanged.
Outsized numbers will mean outsized FX reactions because of reduced liquidity due to the season.
Canadian traders have the domestic Labour Force Survey to add to the mix. Canada is expected to have gained 25,000 jobs in November compared to the 14,500 result in October. A stronger-than-forecast result will have far less of an impact on USDCAD than weak numbers. That’s because the prospect of tariffs suggests the employment market can only get weaker if Trump follows through on the threat.
Oil prices traded negatively in a 67.55-68.49 range despite Opec agreeing to delay previously announced production increases until the endo of April 2025. Traders do not believe the measure goes far enough to address the downward pressure on prices from an expected crude surplus in 2025.
EURUSD held steady within a 1.0566-1.0595 range, consolidating the gains made yesterday as concerns about French politics eased slightly. National Party leader Marine Le Pen tempered tensions by clarifying that she is not seeking Macron’s resignation.
Meanwhile, German Industrial Production dropped 1.0% in October and 4.5% year-over-year, which capped further upward movement in EURUSD.
GBPUSD edged higher, trading between 1.2740 and 1.2774, supported by modest but widespread US dollar weakness against the majors ahead of the nonfarm payrolls report.
The pair also benefited from UK housing data, which showed a 1.3% increase in house prices for November and a 4.8% rise year-over-year.
USDJPY traded within a tight 149.77-150.70 range, mirroring its movement from the previous session.
Traders are in a holding pattern as they await the Bank of Japan and Federal Reserve monetary policy announcements in two weeks.
AUDUSD maintained a bearish tone, fluctuating between 0.6417 and 0.6456, as markets continued to digest Wednesday’s disappointing GDP report.
The Michigan Consumer Sentiment Index is projected to rise to 73 from 71.8.
