Canadian Unemployment Unexpectedly Falls As Economy Adds 79K Jobs

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USD/CAD –  The Canadian unemployment rate unexpectedly fell to 8.5% from 8.6% in November as the economy added 79,100 jobs, which has the most since September, 2008. The gain was led by a 73,000 jump in service sector hires offsetting last month’s 37,000 decline. Although many of the hires could be seasonal, fulltime hires rose for a third straight month by 38,600 signaling that the labor market is strengthening. Continued job creation will put the BoC on alert which will probably re-commit  to its pledged to keep their key interest rate on hold until mid-2010 at next week’s policy meeting. To discuss this and other ideas visit the USD/CAD forum.

USD/CHF – Swiss consumer prices were unchanged from a year ago in November ending eight straight months of declines. Economists were expecting a 0.1% decline as a strong Franc has been importing deflationary forces. Rising energy prices have started to filter through the economy and led to a 0.2% rise in inflation during the month. A 1.4% rise in transportation costs led gains in hosing, utilities and alcohol. The rise in prices may lessen the threat of intervention from the Swiss National Bank, but policy makers still remain concerned over potential deflation and are expected to remain on hold through the beginning of 2010.