JUL 12, 2021
- 230,000 jobs added into Canadian economy
- CAD strength short-lived as job gains are all part-time
- BoC may look into another round of QE tapering
Chart 1: CAD/CHF D1 chart
The Canadian job market made a strong comeback after adding 230,000 jobs in June, surpassing the expectation of 172,000 jobs being added while unemployment rate declined to the expected level of 7.8%. The strong jobs report comes as COVID restrictions were lifted in Ontario Canada. However, it was reported that the jobs gained were all part-time while full-time employment fell slightly, which probably explains why the strength in the Canadian dollar was short-lived. Nonetheless, the Canadian job market is around 330,000 jobs away from a full recovery of all the jobs lost during the pandemic.
The Bank of Canada is scheduled to meet this Wednesday for a monetary policy decision. Although it its expected that the central bank will be holding its interest rate unchanged at 0.25%, it may be motivated to taper its asset purchase again with the job market coming close to full recovery. If so, this may strengthen the Canadian dollar against the safe-haven currency Swiss francs, presenting buying opportunities.
Trade Setup for CAD/CHF (D1)
Buy Stop at 0.73800
Upcoming major news that may impact price movement of CAD/CHF
14 July – Bank of Canada monetary policy decision at 2200 (GMT+8)
14 July – Bank of Canada monetary policy press conference at 2300 (GMT+8)
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