Week in FX Americas – Canada Makes It A One-Two Combo Punch

The loonie has stabilized somewhat outright, and for a brief period traded back in mildly positive territory after North America released it’s job numbers on Friday. Canada made it a one-two punch, keeping pace with its largest trading partner the US south of the border by creating its own +21.6k new jobs. A good number, relatively on par with NFP, but perhaps not as healthy as the Canadian headline would suggest. Their unemployment rate remained unchanged at +6.9%.

The gains in employment were again driven by part-time (+20k) and the self-employed sector (+19.1k). This tends to be a dangerous combination, but was partially offset on the positive side by large increases in private employment (+31.4k) and manufacturing (+24.9k). The public sector and manufacturing happened to shed -73k between them. Overall, the market should feel that it’s a healthy Canadian report, continuing the positive momentum trend witnessed over the past several months. Even with the better than expected gain (21.6k vs. 12k) the pace of hiring in Canada has slowed compared to last year. On a monthly basis, Canada is reporting a 50% reduction in the actual headline for 2013 with a +13.4k net new job print. On a year-over-year basis, employment rose +1% in November, or by +179k jobs. The participation rate did not change month-to-month (+66.4% near its 10-year low) and continues to fail to keep pace with population growth. The report will do little to sway the recent dovish BoC policy expectations.

WEEK AHEAD

* JPY Gross Domestic Product
* CNY Consumer Price Index
* GBP NIESR Gross Domestic Product Estimate
* NZD Reserve Bank of New Zealand Rate Decision
* AUD Unemployment Rate
* CHF Swiss National Bank Rate Decision
* USD Advance Retail Sales

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell