Yesterday the ‘Loonie’ advanced on a broadly softening Pound in the wake of a less-than-enthusiastic policy statement from the Bank of England. As the local session got underway the commodity-driven currency largely retained gains against the Pound but plummeted against the US Dollar following the release of lacklustre domestic employment figures.
The Canadian Dollar Exchange Rate was in the region of 0.6356 against the British Pound as of 14:35 GMT
Although data compiled by Statistics Canada showed that the Canadian economy lost less jobs than expected in June (400, as appose to the 7,500 job losses estimated) the ‘Loonie’ shed 0.9 per cent against a bullish US Dollar, brushing 1.06 per US Dollar – its lowest level since the fourth quarter of 2011.
Canada added 95,000 jobs in May, as previously forecast. The unemployment rate held at 7.1 per cent.
The data prompted strategist Jimmy Jean to assert: ‘It’s a flat number but it’s probably the most shocking flat number we have seen in a while. The concern was we were going to see a big payback after a strong month. I was sceptical we could hang on and we did that.’
However, while the result wasn’t as bad as feared it does add to other recent signs of inconsistency in Canada’s economic recovery. Despite last month’s unexpectedly large job gain Statistics Canada has said that the nation’s job gains have slowed so far this year. Last year jobs advanced by an average of 27,000 a month, this year the figure stands at 14,000.
The CAD/GBP exchange rate hit a low of 0.6251
Similarly, industry expert Jack Spitz commented: ‘It would likely contribute to the market’s possible expectations that the tacit hawkish bias the Bank of Canada now could be guided more dovishly. The reaction would be one of disappointment from a monetary policy perspective in Canada.’
The CAD/USD pairing was also adversely affected by the news that the US added more jobs than expected last month. Although the US unemployment rate held at 7.6 per cent, the nation’s economy added 195,000 positions in June compared with expectations for an increase of 165,000.
US wages also picked up, and while the jobless rate didn’t decline to 7.5 as forecast it still held at an almost four-year low.
Economist Harm Bandholz said of the US figures: ‘The job market is stronger. It’s a good number, especially with the upward revisions.’ [May’s figure was upwardly revised to 195,000]
Bandholz also commented that the Federal Reserve tapering stimulus is ‘getting closer’.
The strong US Dollar is likely to keep the ‘Loonie’ under pressure over the weekend.
Current Canadian Dollar (CAD) Exchange Rates
< Down > Up – Little Changed
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9453 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7378 >
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6352 >
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0405 >
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.2187 <
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.5753 <
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0575 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3548 <
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8249 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9659 >
(Correct as of 14:35 GMT)