Today employment report from Canada is to be released at 12:30 GMT.
This payroll report is published every month and is a vital piece of information on economy with high potential for market movement as the numbers contribute to monetary policy stance by the country's central bank.
Current condition -
- Canada is a stable economy with low political risks even compared to US that recently prompted US companies like Burger King to change headquarters.
- Despite so, the economy has faced headwinds over the oil price as it is a major exporter of the commodity.
- Unemployment has fallen from 7.1% in June 2014 to 6.6% in January 2015; still a high compared to its immediate neighbor US.
- Payroll added net 35,400 people to workforce in January.
- Bank of Canada (BOC) has iterated that it stand ready to reduce policy rates further after recent cut by 25 basis points to 0.75%.
Expectation today -
- Today unemployment rate is expected to deteriorate to 6.7% with a net job loss by 5000.
Impact -
- If the number is better than expected it would buy BOC some time to watch before it takes further actions. In such a case Canadian dollar, that is currently trading at 1.2720 might see recovery however that could be limited given strong dollar.
- Worse print would keep the pressure up for loonie to depreciate further against dollar. Important levels are 1.258 and 1.24 for support; 1.284 for resistance.
