Week in FX Americas – Canada adds to North Americas job gains, so what’s up with the Loonie?

Canada added jobs last month (+12.5k) and has rebounded from a surprise loss in the previous month. The gains were of a full-time variety (+36k), mostly in the public sector, but not enough to change the current unemployment rate (+7.2%). The private sector happened to shed jobs on the month (-20k).

No matter what positive print appeared, it was a healthy turnaround from March’s stunning loss of -54.5k positions. The Canadian economy year-to-date has shed a net -13.2k jobs, for an average monthly loss of -3.3k jobs. The important participation rate in the labor force fell to +66.5% from +66.6% or a mere 500 individuals. Despite the Canadian employment headline coming in a tad shy of expectations, the loonies reaction, an outright weakness versus the “mighty” dollar, has more to do with the ‘big dollar’ bullishness than the CAD.

Excluding the USD/CAD move, the buy North America trade is in full swing. The CAD is up against all the major crosses except the USD, led by CAD/JPY. Asian and London real money accounts have been trying to keep a lid on the USD. It’s not a surprise to see the loonie languish outright against the dollar as the currency was probably a bit overdone on the data alone – the market has been very much long CAD on the over zealous cross trading that has taken place over the last 24-hours. In the big picture, the loonies remains a fundamentally “decent story.”



* CNY New Yuan Loans
* USD Advance Retail Sales
* EUR German Consumer Price Index
* EUR German ZEW Survey (Economic Sentiment)
* EUR German Gross Domestic Product
* GBP UK Jobless Claims Change
* EUR Euro-Zone Gross Domestic Product
* GBP Bank of England Inflation Report
* JPY Gross Domestic Product
* EUR Euro-Zone Consumer Price Index
* USD Consumer Price Index
* CAD Consumer Price Index
* CAD Bank Canada Consumer Price Index Core
* USD U. of Michigan Confidence

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