Daily Currency Update

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The Loonie increases following better than expected employment numbers in Canada.

CAD - Canadian Dollar

The Canadian dollar increased against the Greenback as the nation’s May labour market report showed an unexpected gain. The net change in employment came in at 289.6 k versus the -500k expected. At the same time, the unemployment rate came in at 13.7 percent versus the 15 percent expected. However, it was higher than the prior month of 13 percent.

Early Friday before the release of employment data in Canada, the Loonie had been extending its gains against the Greenback and the Euro as crude oil futures rose to a near three-month high ahead of the weekend’s OPEC+ meeting, which is expected to deliver production cuts.

Key Movers

The U.S. dollar increased 0.25 percent against the Euro, but it is losing 0.53 and 0.55 percent versus the Loonie and the Aussie dollar respectively. The U.S. dollar is beating the Euro this morning following the rebound of the US labour market in May (EUR/USD is trading at 1.1314 at the moment) as business restrictions are easing and Americans are returning to work. Employment numbers rose sharply in sectors like construction, education and health services, retail trade and leisure and hospitality. The change in nonfarm payrolls showed an addition of 2.5 million workers back to payrolls (private payrolls increased 3.1 million) versus the -7.5 million expected (a huge difference between the expectation and the actual number). This may indicate that the the Covid-19 recession could be over.

The Bundesbank said Friday that the German economy, “...has passed the trough of the Covid-19 recession and is starting to grow again,” while endorsing the government’s sweeping fiscal stimulus to support recovery. The Aussie dollar and Kiwi dollar led advances in the commodity currencies group; both of them have increased almost 5 percent versus the US dollar this week.

Expected Ranges

USD/CAD: 1.3390 - 1.3537 ▲

EUR/CAD: 1.5055 - 1.5181 ▼

GBP/CAD: 1.6960 - 1.7089 ▲

AUD/CAD: 0.9300 - 0.9400 ▼

NZD/CAD: 0.8710 - 0.8779 ▲