The Canadian dollar has ticked higher in the Friday session. Currently, USD/CAD is trading at 1.3375, up 0.11% on the day. The spotlight is on employment numbers on both sides of the border. Nonfarm payrolls is expected in at 172 thousand in March, after a dismal gain of 20 thousand in the previous release. Still, this estimate is significantly lower than the December and January releases, both of which were above the 300-thousand level. Wage growth is projected to gain 0.3%, lower than the 0.4% gain a month ago. In Canada, monthly employment is expected to post a small gain of 3.0 thousand in March, after a huge increase of 55.9 thousand in February. Traders should be prepared for movement from the pair in the North American session.
The Canadian economy has been affected by the trade war between the U.S. and China, especially the manufacturing and export sectors. With talks between the two super-economies continuing, there is optimism that China and the U.S. will reach a deal, and that could boost the Canadian dollar. There were reports this week that an agreement is 90% complete, with the remaining issues including enforcement mechanisms and the removal of trade tariffs. The optimism over the trade talks has buoyed share prices in China, with the China 50 index rising to its highest level since March 2018 earlier this week.
Is the U.S. economy experiencing a slowdown? Key indicators have pointed lower, raising concerns about the strength of the economy. Retail sales and durable goods orders recorded declines and the trend continued on Wednesday. ADP nonfarm payrolls plunged to 129 thousand, down from 183 thousand in the previous release. If nonfarm payrolls and wage growth are soft, the greenback could lose ground.
