USD/CAD – CAD falls on Canadian jobs report and stronger NFP

  • Canada March net change in employment: -7.2K vs. +6ke
  • Unemployment rate: +5.8% vs. +5.8%e
  • Full time employment change: -6.4k vs. +5.4ke
  • Part time employment: -0.9k vs. +7.0ke
  • Participation rate: +65.7 % vs. +65.7%e
  • Hourly wage rate Y/Y: +2.3% vs. 2.2%e
  • Data from Stats Canada this morning showed that Canada’s jobs market contracted slightly last month, coming in below expectations after two-months of exceptionally strong gains.

    On a seasonally adjusted basis, Canada lost a net -7.2k jobs. Market expectations ranged from +6k to +10k new jobs.

    Canada’s jobless rate was unchanged from the previous month at +5.8%, matching expectations.

    In Q4 2018 and Q1 2019, Canadian data has revealed a period of weakness, which Governor Poloz at the Bank of Canada (BoC) has referred to as “a detour,” and said in March that he “anticipates growth will get back on track later this year.”

    The loonie is currently trading at the low of the day outright, just shy of the C$1.3400 handle at C$1.3384. with stronger commodity prices, the market seems interested in buying CAD on USD rallies above C$1.3410-20 in the short term.

    The ‘big’ dollar has been well bid in early trading on a strong non-farm payroll (NFP) headline print (+196k vs. +172k). It’s the ideal report for supporting risky assets – strong hiring, combined with muted wage growth (average hourly earnings +0.1% m/m vs +0.2e). There is nothing in today’s report to suggest the U.S labor market is rolling over nor is there anything to suggest that inflation could pick up at a pace that pushes the Fed to rethink its dot plan.

    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