The Canadian dollar today gained significantly against the US dollar after the release of Canada’s labor market report by Statistics Canada, which exceeded expectations. The loonie rallied against the greenback despite the fact that the greenback was performing quite well as tracked by the US Dollar Index.
The USD/CAD currency pair plunged to new session lows losing over 90 points in a span of two hours after the release of the jobs report.
The Canadian dollar rallied higher after the release of Canada’s labor force survey, which indicated that Canada had added about 54,500 jobs in May, exceeding the market expectations of an additional 11,300 jobs. Canada’s unemployment rate for the month of May also met expectations as it came in at 6.6%, which was slightly higher than April’s 6.5%. Further, Canada’s capacity utilization rate increased to 83.3% exceeding expectations by 0.9%, while also higher than the previous 81.8%.
Although the US dollar as tracked by the US Dollar Index was stronger against most of its peers for the better part of today, the greenback was no match for the rejuvenated loonie after the jobs report. The greenback was expected to resist the loonie’s rally, but the buying pressure on the Canadian dollar was too high.
Given the empty Canadian docket up to Wednesday, the currency pair’s future performance is likely to be affected by global oil prices as the loonie is a commodity-backed currency.
The USD/CAD was trading at 1.3440 as at 16:36 GMT having dropped from a daily high of 1.3528 earlier today. The EUR/CAD was trading at 1.5051 having declined from a high of 1.5157.
If you have any questions, comments or opinions regarding the Canadian Dollar,
feel free to post them using the commentary form below.
