The Canadian dollar dropped today after Canada’s employment ended the longest streak of gains since 2002, contracting last month. The loonie managed to bounce against European majors like the euro and the Swiss franc but kept losses versus such currencies as the US dollar and the Japanese yen.
Canada’s employment shed 88,000 jobs in January following the 78,600 gain in December. That is instead of rising by 10,300 as analysts had predicted. It was not only the first decline since July 2016, it was also the biggest drop since the end of recession. Employment declined in both public and private sectors. Yet diving deeper into the report, the situation did not look that bad as part-time jobs took the major hit, while the number of full-time jobs actually increased.
Despite the big drop, the unemployment rate ticked up just a little from 5.8% to 5.9%. That is because of the decline in the participation rate.
The Canadian jobs market still looks solid as the big drop followed the impressive streak of gains. That allowed some analysts to speculate that the Bank of Canada will remain on track to normalize monetary policy, performing additional interest rate hikes in 2018.
USD/CAD advanced from 1.2601 to 1.2619 as of 18:29 GMT today, though it retreated from the daily high of 1.2687. EUR/CAD declined from 1.5431 to 1.5409, pulling back from the day’s high of 1.5557. CAD/JPY declined from 86.29 to 85.81, trading near the lowest level since August 11. CAD/CHF was up from 0.7426 to 0.7437, while its session low of 0.7387 was the lowest since July 3.
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