Canada releases August jobs data at the same time as the US today, ING's FX analyst Francesco Pesole notes.

CAD to be a laggard in the G10 space

"Expectations are for a 5k rise in employment after the 40k contraction in July. Given the volatility of payrolls figures, more focus is on the unemployment rate, which at 6.9% is already well above the 2018-2019 levels but is expected to climb to 7.0%, with risks skewed to an even higher figure in our view."

"While markets have brought forward expectations for the next cut to October, we think the probability of a move in September (15bp) is underpriced and we could see a dovish rerating after today’s jobs numbers. Inflation slowed further below target to 1.7% in July, and core measures remain at a tolerable 3.0%."

"We continue to expect CAD to be a laggard in the G10 space, although USD weakness should still keep USD/CAD capped to the 1.38 area in our view."