The Canadian labour market remains red-hot. While the jobs data might do little to assuage the BoC's concern over whether they have done enough on rate hikes, the CAD remains near-term challenged, economists at TD Securities report.

CAD to stay on the defensive on crosses 

“The Canadian labour market continues to fire on all cylinders with no sign of mean reversion after 150K jobs were added in January. This number will not change that risks are far more fluid around the Fed than the BoC.”

“Moreover, we think a higher fed funds terminal rate could raise the perceived risk of a hard landing or a financial accident. That, alongside domestic debt imbalances and fragile risk sentiment, should keep CAD on the defensive for now.”

“We see support emerging into 1.3750 for USD/CAD, and CAD biased to lag on crosses.”