Canada Employment: Room for a pronounced CAD impact from a data surprise – ING

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Canadian jobs numbers have the potential of driving large CAD swings today, economists at ING report.

“Markets are pricing little to no chance of further rate hikes, but equally seem reluctant to factor in any rate cuts by year-end. This leaves some room on both ends for a pronounced CAD impact from a data surprise today.”

“A weak number could fuel easing bets (risk of cuts is higher than expected anyway, in our view), while a strong number – paired with the recent revision higher in Fed rate expectations – could encourage markets to contemplate one last hike by the BoC.”

“We still expect USD/CAD to test 1.3000 in the coming months, but the key driver may be USD weakness rather than Loonie outperformance.”

See – Canadian Employment Preview: Forecasts from five major banks, little if any gain

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