The CAD lost almost 2% versus the USD last week with disappointing Canadian Q1 economic growth underscoring the currency weakness. This week, labour market data on Friday will be closely watched. The market is forecasting the unemployment rate to remain unchanged at 6.8% and 10k new jobs. It is believed that the effect of lower oil prices on investment and, consequently, growth will be long lasting, whereas higher unit labor costs in the manufacturing sector are likely to impede the economy’s ability to take advantage of a weaker currency. “We remain bullish on USDCAD over the coming months and remain short CADMXN”, said Barclays in a report on Monday.
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