TD Securities expects USD/CAD to remain supported above 1.40 after October employment data showed diverging conditions in the United States and Canada, potentially affecting rate expectations.
Reuters and FXStreet separately reported the firm's outlook. The call continues the earlier TD Securities USD/CAD outlook.
Statistics Canada (StatCan) said employment edged down by 4,700 in October, while the unemployment rate rose to 6.7% from 6.5% in September. Average hourly wages reached C$37.89, up 2.2% from a year earlier, compared with 2.3% annual growth in September. The wage figures were not seasonally adjusted.
The U.S. Bureau of Labor Statistics (BLS) reported that nonfarm payrolls increased by 165,000 in October, up from a revised gain of 60,000 in September. The unemployment rate fell to 4.1% from 4.2%.
Canada's figure comes from its Labour Force Survey, while U.S. payrolls are measured through the establishment survey. Their monthly job-count changes are not directly comparable and should be assessed within each country's own data series.
Reuters and FXStreet attributed the view to TD Securities: rising unemployment and slower wage growth in Canada may temper expectations for another Bank of Canada (BoC) rate increase relative to expectations for a Federal Reserve increase. The BoC raised its overnight rate target by 25 basis points to 2.5% on Oct. 28. It said the increase was intended to keep higher energy costs from spreading into other prices, and separately said further increases might be needed. The Fed held its target range at 3.75% to 4% that day.
The November employment reports for both countries are scheduled for Dec. 4, with the U.S. release set for 8:30 a.m. ET. The BoC's next rate announcement is scheduled for Dec. 9, and the Fed's next policy meeting is set for Dec. 8-9.
