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Canadian Unemployment Unexpectedly Falls to 8.4%

Friday, 09 October 2009 12:57:26 GMT  |  John Rivera, Currency Analyst

Fundamental Headlines

• A Rocky Road to Economic Recovery – Wall Street Journal
• Japan Machinery Orders Creep Up – Wall Street Journal
• US retailers in first gain since 2008 crisis – Financial Times
• Bernanke Says Fed Will Be Ready to Tighten Policy When Economy Improves – Bloomberg
• Dollar Soars Most in Two Months, Bonds Fall on Bernanke; Commodities Drop -Bloomberg

USDCAD- The unemployment rate in Canada declined to 8.4% in September from 8.7% in August, amid economists’ expectations for a gain of 8.8%, as new hires expanded by 30,600. A look at the breakdown reveals a surge in full-time jobs by 91.6K versus lasts month decline of 3.5K. Employer’s commitment to long term hires is a sign of improved outlook for future growth. Additionally, a rise of 46.2K in goods producing jobs is a clear sign that  Looking forward, the BOC will likely keep interests rates at its current level but will continue monitoring the economy, with the intentions to tighten monetary policy if inflationary fears cultivate.  To discuss this and other ideas visit the USD/CAD Forum.

GBPUSD- .U.K. factory gate prices rose 0.4% in September on an annualized basis surpassing estimates of -0.1%. September saw costs passed on to consumers rise for a seventh straight month by 0.5% which led to the first yearly gain in five months. Meanwhile, declining imports outpaced weakness in exports leading to the narrowest trade deficit since 2006. Rising inflation combined with declining demand from abroad could put the BoE in a difficult situation. The central bank may not be able to sustain their stimulus efforts of prices continue to rise which could be the economy’s recovery in jeopardy.  To discuss this and other ideas visit the GBP/USD Forum.
 

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