Following the release of the US labor market data last Friday, including positive NFPR, the USD rose in the pair USD/CAD. It became known that NFPR in June increased by 287.000 against the forecast of 175.000. Unemployment rate rose to 4.9% against the forecast of 4.8% and 4.7% in May, Note, that unemployment rate in the USA has been below the level of 5.0% for a few consecutive months.
At the same time, Canadian data on the labor market was weak. Unemployment rate in Canada fell in June (6.8% against 6.9% in May). However, economists believe that the number of people who are looking for a job has decreased. Reduction of the jobs in Canada in June amounted to 700 against the expectation that the number of jobs will grow by 5000.
Today at 16:00 GMT + 2, The Bank of Canada will adopt interest rates decision. Currently, the rate in Canada is at the level of 0.5%, and, according to market participants, the Bank of Canada is likely to leave it unchanged. The rise in the housing prices in some regions of Canada, as well as record level of the household debt will prevent the Bank of Canada from easing monetary policy, despite the decline in oil prices and other weak macroeconomic indicators of the economy of the country.
However, even if the Bank of Canada will leave interest rate unchanged today, volatility in the Canadian dollar is expected to be high.
However, in general, the pair USD/CAD will be strongly affected by the movement in the USD and changes in oil price, which has been declining lately.
Considering also, that the US Fed continues to tighten monetary policy and US macro-economic data is positive, the pair USD/CAD may go up in the medium term.