The Canadian economy lost 9.4K jobs in June and the unemployment rate in Canada rose to 7.1%. Canada was expected to report a gain of just over 20K jobs in June after 25.8K in May. The unemployment rate was expected to remain unchanged at 7%. This is clearly a disappointment on all accounts. The Bank of Canada certainly has room to leave rates at low levels.
USD/CAD traded around 1.0650 just before the publication, up from lower levels seen earlier in the day. USD/CAD is now above 1.0670– more coming.
Update: The C$ continues to tumble and the new high is 1.0690. 1.07 provides resistance. Further resistance awaits at 1.0750. Support is at 1.0620 followed by 1.0550. For more lines, see the USDCAD prediction.
The sliver lining in the report is that the job losses originate from a loss in part time jobs: 43K. Canada actually gained full time jobs: 33.5K. This is in sheer contrast to Australia’s job gains, which had shown a different picture altogether.
The Canadian dollar enjoyed a surge in recent weeks – a move that began with the better than expected retail sales and inflation figures. Also the crisis in Iraq helped the loonie indirectly by boosting oil prices and also the improvement in the US is C$ dollar positive – more US demand for Canadian goods.
Here is the preview: how to trade the Canadian employment with USDCAD.
