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Canadian Dollar Surges on Impressive Labor Market Reading

Canadian Dollar Surges on Impressive Labor Market Reading

Christopher Vecchio, CFA, Senior Strategist

The Canadian economy continues to surprise. After adding a whopping 82.3K jobs in March, the labor force expanded even further, adding 58.2K jobs against a forecast of 10.0K, according to a Bloomberg News survey. Such an explosive print – 4.5 standard deviations (10.7K) higher than the estimate – gives credence to the notion that the Bank of Canada is likely to raise its key interest first among the major central banks.

Unlike the Australian labor market reading, which showed that the upward tick in data was a result of part-time jobs added, the majority of the Canadian labor market’s gains came from a surge in full-time employment (at 43.9K, full-time jobs accounted for 75.4 percent of overall labor market growth). Accordingly, the participation rate jumped to 66.8 percent from 66.6 percent in March, negatively influencing the unemployment rate, which ticked higher to 7.3 percent in April from 7.2 percent.

USDCAD 1-minute Chart: May 11, 2012

Canadian_Dollar_Surges_on_Impressive_Labor_Market_Reading_body_Picture_2.png, Canadian Dollar Surges on Impressive Labor Market Reading

Charts Created using Marketscope – Prepared by Christopher Vecchio

Immediately after the print, the Canadian Dollar surged across the board, with the USDCAD dropping from 1.0045 to as low as 0.9984, its lowest such exchange rate in 24-hours. The GBPCAD plummeted significantly as well, sliding from 1.6179 ahead of the print to as low as 1.6060. On what is otherwise a risk-averse day, the Canadian Dollar is the top performer, up 0.23 percent against the US Dollar, up 0.72 percent against the British Pound, and up 0.75 percent against the Australian Dollar.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to cvecchio@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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