Even though most traders will be focused on the US non-farm payrolls report tomorrow, with the Canadian dollar hovering near its 31 year highs, Canada?s employment report will be important as well.
The market is currently looking for stronger payroll growth, but the employment component of the September IVEY PMI report suggests otherwise. The IVEY dropped from 58.5 to 56, but the employment component fell to the lowest level since February. In the past, the IVEY has done a good job of forecasting Canadian employment, which is why tomorrow?s number could help trigger gains in USD/CAD. The Australian and New Zealand dollars also performed very well today. Both pairs are up strongly thanks to a jump in commodity prices and stronger Australian service sector PMI. The Australian economy is doing well, fueling speculation for another rate hike.
[B]Written by Kathy Lien, Chief Currency Strategist for DailyFX.com[/B]