Canadian Dollar Weakens As Jobs Momentum Fades

The Canadian dollar is slipping against several currency rivals on Monday, suggesting that the euphoria from last week’s better-than-expected jobs report may have dissipated to kick off the week forex markets. While the current labor market is one of the best Canada has ever had, the economy has returned to its anemic state. How much will the economy play in next week’s federal election?

According to Statistics Canada, the economy added 53,700 jobs in September, beating the market estimate of 50,000. The considerable gains lowered the unemployment rate from 5.7% to 5.5%. Overall, there were 456,000 more jobs in Canada than at the same time a year ago, boosting employment by 2.4%.
The biggest gains were seen in Ontario and Nova Scotia, and the healthcare, social assistance, accommodation, and food sectors accounted for nearly all the job growth. Moreover, full-time work ramped up, part-time employment declined, and the 12-month average hourly wage rate jumped 4.3% last month.
The stellar jobs numbers come days after the national statistics industry reported that the Canadian economy was flat in July, following four consecutive months of growth. The market had penciled in a 0.1% increase. Eight of the 20 industries monitored by the federal government contracted, including mining, quarrying, and oil and gas extraction
On Monday, the general election will be held, and the polling averages suggest Andrew Scheer and the Conservative Party will form a minority government with more than 32% of the vote. But it is still a tight race with Prime Minister Justin Trudeau and the Liberals registering at 31.7%, followed by the New Democratic Party with 16.5%. NDP leader Jagmeet Singh revealed that he would be interested in forming a coalition with the grits should Scheer and the Tories win the election.
Following the election, the Bank of Canada (BOC)‘s policy decisions will come into focus. BOC Governor Stephen Poloz did say that interest rates would not be changed until after the electoral contest. The central bank might follow in the footsteps of the rest of the world and cut rates and ease monetary policy.
The USD/CAD currency pair rose 0.11% to 1.3215, from an opening of 1.3202, at 11:03 GMT on Monday. The EUR/CAD jumped 0.03% to 1.4578, from an opening of 1.4574.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *