Employment numbers in Canada are the strongest since 1976
Friday 7 June, 2019
Daily Currency UpdateCAD - Canadian DollarThe Loonie rallied to a new 51-day high against the Greenback (the USD/CAD pair touched a low of 1.3290), strengthened by the strongest employment numbers seen in 43 years. According to Statistics Canada, employment held steady in May, following a sharp increase in April. The unemployment rate was down 0.3 percentage points to 5.4 percent, as the number of people looking for work decreased sharply following little change over the previous three months. The unemployment rate in May was the lowest since comparable data became available in 1976. Compared with May 2018, employment grew by 453,000 or 2.4 percent, reflecting gains in both full-time and part-time jobs. Over the same period, total hours worked were up 1.0 percent. Additional positive news for the Loonie includes barrel crude oil WTI, which is trading strongly this morning, over 1 percent higher, after Saudi Arabia and Russia echoed their commitment to work together and keep the global market balanced. Saudi Arabia’s top oil official said he was sure that OPEC would extend production cuts into the second half of the year after holding talks with Russia. Technically speaking, the USD/CAD pair seems oversold, and it is trading at 1.3279. The next critical support is 1.3275, which coincides with the 200 moving average on the daily chart. On the other side, the resistance levels are 1.3313, 1.3322, and 1.3342.
Key MoversIn contrast with Canadian economic data, the employment numbers in the U.S. are weakening. U.S. non-farm payroll employment increased by a meager 75,000 in May, compared with a consensus estimate of 180,000. However, the unemployment rate remained at 3.6 percent, the lowest rate since December 1969. The May payrolls fell well short of the 224,000 jobs (revised down from 263,000) created in April. The worst month so far was in February, when employers added just 20,000 jobs amid bitter winter weather. People’s Bank of China Governor Yi Gang said that his meeting this weekend with U.S. Treasury Secretary Steven Mnuchin would probably be a “productive talk, as always.” He also added that China has “tremendous” monetary and fiscal policy space to make adjustments to the economy should the trade war worsen. The USD/CNH pair falls 0.22 percent this morning (stronger Chinese Yuan).
- USD/CAD: 1.3275 - 1.3345 ▼
- EUR/CAD: 1.5024 - 1.5100 ▲
- GBP/CAD: 1.6909 - 1.6988 ▲
- AUD/CAD: 0.9300 - 0.9346 ▲
- NZD/CAD: 0.8840 - 0.8880 ▲