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.