Canadian employment demonstrated strong growth in May and economists were expecting June to follow suit, showing continuous improvement of the labor market. Yet today’s report provided a nasty surprise to those Forex market participants who were hoping to buy the loonie as employment data was not good at all, driving the currency down sharply.
Employment shrank by 9,400 in June after rising as much as 25,800 in May, meaning that analysts were completely wrong with their predictions of robust growth at about 20,700. What is more, the unemployment rate unexpectedly ticked up by 0.1 percentage point to 7.1 percent.
Admittedly, the report was not completely bad as the main driver for the drop was the fall of part-time employment, while the number of full-time jobs actually increased. Yet this did not help the Canadian currency at all, which is heading to a weekly loss now. It is important to remember that the Bank of Canada holds a monetary policy meeting next week, and the poor employment data will likely affect plans of Canadian policy makers.
USD/CAD jumped from 1.0648 to 1.0703, and EUR/CAD rallied from 1.4491 to 1.4563 as of 13:55 GMT today. CAD/JPY plunged from 95.15 to 94.64.
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