After a pause of one month in significant job gains, the Canadian economy is back on track and enjoys accelerated hiring. No less than 54.5K jobs were gained in May, much more than 15K expected. The unemployment rate remains at 6.5%, but the participation rate is on the rise: 65.6% to 65.8%.
USD/CAD dropped to a low of 1.3446 from above 1.35 prior to the publication. It remains around the same area, around 1.3455 at the time of writing. Further support awaits at 1.3380, followed by 1.3220. Resistance is at 1.35.
The underlying numbers are even better: a jump of 77K full-time jobs and a fall of 22.3K part time ones. The dynamics of full-time and part-time jobs fluctuate quite wildly, but May’s report is a good one.
The Canadian dollar has been torn between falling oil prices and an improving economy. Oil prices could not sustain the gains seen after the extension of the OPEC deal. A rise in inventories hurt the loonie. On the other hand, this jobs report is joining a better than expected growth rate in March. All in all, the pair trades in a relatively narrow range and lacks a clear trend.
Will this publication send the loonie higher and USD/CAD lower for longer?
More: CAD: A Couple Of Major Positives – Where To Target? – SocGen
