Week in FX Americas – Is the Loonie and ‘Big’ Dollar Move for Real?

No one was close to reporting the North America jobs numbers. Canada and the US headlines blew all forecasts out of the water, and for the time being have convinced the market that they need to buy North America.

Both countries’ released improved unemployment rates. The downtick to the US unemployment rate to +7.7% from +7.9% can partly be attributed to Americans dropping out of the workforce. Analysts note that the participation rate fell to +63.5% last month from +65.6%, which is now officially the lowest rate in 33-years. This is probably the only obvious knock against this months NFP release. On the surface, it’s not a very healthy way to achieve a jobless rate decline and it will be used as fodder for the pro-stimulus members at the Fed.

The +51k busting print for February from the Canadians is very much a showstopper. However, it’s worth noting that their job survey is usually very volatile because of the much smaller sample. The fulltime print of +33k new jobs has the loonie ‘strutting’ on the crosses with very little been given up.

CAD is dominant in EUR/CAD, CAD/JPY and against its commodity cousin the AUD. Along with the stateside job numbers, the release provides a good bullish argument to want to own the loonie now that the rate dealers have priced out any chance of a Central Bank rate cut this year after the BoC meet in mid-week. Now we have to wait and see if momentum is carried over into next week.



* JPY Japanese Parliament Vote on BoJ Governor Nominations
* EUR German Consumer Price Index
* USD Advance Retail Sales
* NZD Reserve Bank of New Zealand Rate Decision
* AUD Employment Change
* CHF Swiss National Bank Rate Decision
* USD Producer Price Index
* EUR Euro-Zone Consumer Price Index
* USD Consumer Price Index

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