CAD sees strength after positive employment data, lower unemployment number
Published on: 08/16/18 11:31 AM
Category: Uncategorised
On Friday, the latest Canadian employment data arrived. In good news, the data went above expectations and that have a boost to the Canadian Dollar (CAD). Reportedly, the jobs added in the month of July was 54,100 jobs which beat a forecasted number of 17,000. Unemployment was forecasted at 5.9 percent for July. However, in the report on Friday, unemployment came in at 5.8 percent, which was also lower than June’s 6 percent, per DailyFX.
The good employment and unemployment news helped the USD/CAD pairing climb a bit on the charts, going over the 1.3000 psychological level. As of the latest reports, the pair was trading at approximately 1.31290 on the charts at DailyFX. The Euro and CAD pairing also say a brief upward trend after the good news. EUR/CAD was trading at 1.49574 as of the latest report.
As CTNews reported via The Canadian Press, there is a bigger picture when it comes to overall employment. There was a drop in terms of full-time work and more part-time public sector jobs arrived. Reportedly, the public sector added 49,600 jobs and the private sector brought 5,200 more jobs into Canada.
CIBC chief economist Avery Shenfeld published a research note for clients on Friday which said July’s numbers “came up with some big headlines but some disappointments in the fine print.” He added that the current employment situation still gives “lost of reasons to question just how good the data really are.” Overall employment is still up over the past year, though, with 210,500 brand new full-time jobs added, giving a total of 245,900 jobs in that time.
Shenfeld believes there was a “good” batch of overall numbers. He said it has been a “very solid labor market with a low unemployment rate” for Canadians over the past year. He also believes it will keep the markets guessing about any rate hikes. Traders will be paying close attention to the news there. Back in July, the Reserve Bank of Canada raised the interest rate to 1.5 percent, which made it the largest rate seen in a decade. Speculation is already going around that the central bank may hike the rate another 22 percent on September 5th.
While this week had some impactful economic data, traders won’t see quite as much in terms of next week’s reports. Next Friday, the CAD CPI data will arrive. In June, the CPI was at a 2.5 percent figure, so traders will be watching for more good news in a week.