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US and Canadian dollars brace for labour market data

business-articlesUS and Canadian dollars brace for labour market data
  • Canadian dollar vulnerable ahead of jobs data
  • Falling unemployment forecast to boost US dollar
  • Lack of Brexit progress continues to weigh on pound
 
 
Slowing Canadian labour market to dent Canadian dollar
 
Confidence in the Canadian dollar may falter this afternoon if February’s labour market data fails to show signs of tightening.
 
As forecasts point towards a decline in the participation rate, however, the mood of CAD exchange rates looks set to deteriorate once again.
 
Confirmation that fewer Canadians are now active within the job market would mean confidence in the outlook of the wider economy is likely to weaken.
 
On the other hand, a solid uptick in employment could offer the Canadian dollar a boost ahead of the weekend.
 
 
US dollar set for volatility on US payrolls report
 
The US dollar is also expected to see volatility on the back of February’s US non-farm payrolls report today.
 
Although the headline change in non-farm payrolls figure is expected to ease on the month, falling back from January’s sharp increase, USD exchange rates could find a boost this afternoon.
 
With the unemployment rate forecast to dip from 4.0% to 3.9% confidence in the underlying resilience of the US economy may improve.
 
While a tighter labour market is unlikely to be enough to encourage the Federal Reserve to return to a hawkish bias this could still give the US dollar a leg up against its rivals.
 
 
Brexit worries to keep pound on weaker footing
 
In the absence of any fresh UK data the mood towards the pound looks set to deteriorate further over the course of the day.
 
Worries over Brexit are likely to keep GBP exchange rates biased to the downside in the near term, with investors disappointed by the continued lack of progress.
 
Unless officials show signs of moving towards a compromise on the Irish border issue the appeal of the pound may remain muted.
 
With the Brexit deadline drawing closer, as long as the two sides remain at odds GBP exchange rates could struggle to return to a stronger footing.
 
 
Upcoming Data:
 
Friday, 8th March 2019
13:30 CAD Unemployment Rate
13:30 USD Change in Non-Farm Payrolls
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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