The Canadian dollar has edged lower in the Monday session. Currently, USD/CAD is trading at 1.3098, down 0.08% on the day. On the release front, there are no Canadian indicators. In the U.S, ISM Non-Manufacturing PMI is expected to drop to 59.3 points. On Tuesday, the U.S will release JOLTS Job Openings and all eyes will be on the U.S midterm congressional elections. Canada will release Building Permits.
Canadian employment data was solid in October. The economy added 11.2 thousand jobs in October, but this was shy of the estimate 12.7 thousand. The unemployment rate ticked lower to 5.8%, a shade better than the forecast of 5.9%. These numbers will likely increase the likelihood of a rate hike from the Bank of Canada in early December. The economy is doing well and the BoC is also mindful that the Federal Reserve is expected to raise rates again in December, which would mark a fourth rate hike in 2018. Policymakers do not want to see divergence widen between U.S and Canadian rates, and another rate hike from the BoC would be bullish for the Canadian dollar.
The U.S economy continues to perform well, a fact that will be hammered home by President Trump and the Republicans in the few hours left until Election Day on Tuesday. The labor market is at or beyond capacity, and nonfarm payrolls surged to 250 thousand, crushing the estimate of 194 thousand. Wage growth has also strengthened, with strong gains of 3.1% in the past year. Despite these strong numbers, the dollar failed to make headway on Friday, as reports that President Trump will present his Chinese counterpart with a trade deal proposal increased risk appetite and weighed on the greenback.
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