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Canadian dollar steady after weak jobs report

CAD - Canadian Dollar

US dollar weakness after a disappointing jobs report helped push the Canadian dollar up today, even as Statistics Canada reported a loss of 207,100 jobs in April.

Statistics Canada says the lost jobs were due to a third wave of Covid-19 cases and new lockdowns, largely in line with economist expectations. Analysts are optimistic that with the faster pace of vaccinations and lifted restrictions, pandemic-hit sectors like retail will see a rebound in the coming months.

USDCAD has been pushed to multi-year lows as demand for the Canadian dollar keeps nudging up thanks to high commodity prices. The Canadian dollar traded at 82.26 US cents at the close on Thursday, its highest close since September 2017.

Key Movers

US dollar softness helped the euro climb off lows to 1.212 today, while GBPUSD was a touch higher at 1.393.

On Thursday, UK monetary policy makers voted to leave interest rates unchanged yesterday, while slightly tapering the asset purchasing program. Yesterday’s news caused GBPUSD to dip by 0.4% for a moment before retracting higher on the improved economic outlook. Bank of England Governor Andrew Bailey revised his GDP growth to 7.25% for 2021, which strengthened the pound. Bailey concluded with “We have not yet completed our review into the sequencing of policy tightening” and insisted that the reduction in gilt purchasing was not a tapering decision. It suggests that we will not see a rate hike in the next meeting, however, are more likely than before Thursday’s meet to see one before the end of 2021. This would be sterling positive.

Demand for the US dollar took a tumble after non-farm payrolls data reported only 266,000 jobs added in April. Economists were expecting an increase of 978,000 jobs. The unemployment rate also unexpectedly nudged up to 6.1% from 6%. Despite easing restrictions and a nationwide vaccination program, the disappointing data underscores what could be the US labor market’s choppy recovery post-pandemic.

Expected Ranges

EUR/CAD: 1.465 - 1.478 ▲

GBP/CAD: 1.687 - 1.700 ▲

AUD/CAD: 0.943 - 0.952 ▲

USD/CAD: 1.214 - 1.221 ▲