Canadian Dollar Loses Steam After Initial Gains

The Canadian dollar advanced today with the help of an impressive employment report that beat analysts’ projections by a wide margin. The currency retained its gains against the euro but was unable to maintain the rally versus the the US dollar and yen and will likely close below the opening level against these currencies.
Canada’s employment data, unlike Australia’s one, was really good, helping the loonie to log gains. Canadian employers added a whooping 74,100 jobs in September, much more than was predicted by experts — 18,700. Growth was registered both in full-time and part-time employment, and full-time jobs were the major contributor to the general increase of employment. As a result, the unemployment rate unexpectedly fell from 7.0 percent to 6.8 percent.
The positive data may prompt the Bank of Canada to review its plans for monetary policy. The BoC was talking about weakness of the labor market as a sign of slack in economic growth, but today’s report gives hopes for traders with bullish bets on the loonie that the central bank may consider monetary tightening earlier than was expected previously.
USD/CAD declined from 1.1185 to 1.1160 intraday but bounced to 1.1212 as of 19:27 GMT today. CAD/JPY fell from 96.41 to 96.11 following the rally to 96.67. At the same time, EUR/CAD was down from 1.4193 to 1.4145.

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