As it often happens, Canadian jobs figures will be released at the same time as the US ones, and the USD/CAD reaction will depend on a mix of the two prints.

We think that a jobs report matching consensus would be enough to keep market expectations for more BoC tightening alive. However, data volatility is an issue in Canada, and the chances of a negative read are relatively high.

Unlike previous instances, USD/CAD isn’t overvalued at current levels, and we would favour any CAD strength on the back of good domestic data against other pro-cyclical currencies as opposed to the USD.