Loonie Erases Losses on Improved Canadian Employment
- Net Employment rises 11.9K in September, better than expected
- BoC said rate connected to the economy
- USD/CAD erases earlier gains
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The Canadian Dollar erased a sudden decline and hit a new session high following the release of better than expected employment data. The Canadian economy saw net 11,900 additional jobs added to the economy in the month of September, beating expectations for only 10 thousand additional jobs, but not as good as the 59.2 thousand rise in employment seen in August.
The Canadian unemployment rate fell to 6.9%, according to statistics Canada, which was better than expectations for the rate to remain at 7.1%. However, the participation rate fell to 66.4% from 66.6% in August.
The new governor of the Bank of Canada, Stephen Poloz, said in July that central bank’s rates will rise with economic growth. The BoC also predicted in July that the economy will be choppy in the near term, but the central bank predicted 1.8% GDP growth in 2013. Therefore, the better than expected employment data adds to signs that the economy is improving and possibly brings a rate increase closer, which is therefore Loonie positive.
The US Dollar fell 20 pips against the Canadian Dollar to 1.0380 after the employment data was released. USD/CAD may see resistance by a broken upward trend line from May around 1.0435, while support may be provided by the 100-day moving average around 1.0370.
USD/CAD Daily: October 11, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
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