Trading Canada employment data on Friday – BofA | Forexlive

Bank of America Global Research
discusses its expectations for USD/CAD around tomorrow’s Canada jobs
report for the month of January.

“The upcoming Canada employment data would
likely be in focus, given lack of US NFP data this Friday and the BoC
has become data dependent. We find over the past two years, the CAD/USD exchange rate has had a strongly positive correlation with Canada employment data surprises,” BofA notes.

“Our economists and consensus forecast both look for Canada to add 15k employment for Jan 2023. The risk may be to the upside,
given two recent large surprises for Oct and Dec 2022, respectively
leading to immediate 0.57% and 0.72% CAD/USD rallies in the two hours
after the data release…In the event
that CA employment data indeed surprises to the upside this Friday, we
would expect some tailwind for CAD and for USD/CAD to fall below the 1.34-handle,” BofA adds.

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