USD/CAD is showing little movement on Friday, but that has changed early in the North American session, with the release of key events on both sides of the border. In Canada, employment numbers were mixed. In the US, the Producer Price Index declined for the fourth time in five months. The headline figure came in at -0.3%, while the core reading posted a decline of -0.4%.
Canada’s economy creates almost 1M jobs
The economy created 952.9 thousand jobs in June, far surpassing the estimate of 550.0 thousand jobs. The employment rate dropped to 12%, but this was higher than the forecast of 12.3%. All in all, it was a positive week for Canadian releases. The Ivey PMI in June jumped to 58.2, up sharply from 39.1 beforehand. This reading was particularly welcome because it marked the first expansion for purchasing activity in four months. This was followed by Housing Starts for June, which punched past the 200-thousand level for the first time since January.
Canada’s economy appears on the mend, but the recovery is expected to be slow. After a disastrous Q1 in the wake of the Covid-19 pandemic, economic numbers have improved. However, the recovery will come at a significant cost. The government announced that it has provided CAD 212 billion in direct aid for Covid-19. Inflation forecasts have been cut, with the inflation rate expected of just 0.5% until mid-2021. This is well below the Bank of Canada’s target of around 2 percent.
Friday (July 10)
- 8:30 Canada Employment Change. Estimate 550.0K. Actual 952.9K
- 8:30 Canada Unemployment Rate. Estimate 12.0%. Actual 12.3%
- 8:30 US PPI. Estimate 0.1%. Actual -0.3%
- 8:30 US Core PPI. Estimate 0.4%. Actual -0.2%
*All release times are EDT
*Key events are in bold
USD/CAD is almost unchanged in Friday trade. The pair is currently trading at 1.3590, up 0.04%. In the Asian session, the pair recorded slight gains but was unable to consolidate and gave these up in European trade.
- 1.3716 is the next resistance line. It has held in place since June 1
- 1.3550 has remained relevant all week. Currently, it is providing support
- USD/CAD has pushed just above the 9-day MA, which could point to a breakout into higher territory
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