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Canadian Dollar Tumbles on Severely Disappointing Employment Data

Canadian Dollar Tumbles on Severely Disappointing Employment Data

Baruch Spier,

Talking Points:

  • Canada Employment Change severely disappoints expectations
  • Labor force participation at a 12-year low
  • USD/CAD rallies to a 3-day high

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Canadian Employment Data for April

Actual

Expected

Prior

Net Change in Employment

-28.9K

13.5K

42.9K

Unemployment Rate

6.9%

6.9%

6.9%

Participation Rate

66.1%

66.3%

66.2%

Full-Time Employment Change

-30.9K

12.8K

Part-Time Employment Change

2.0K

30.1K

The Canadian Dollar declined sixty pips against the US Dollar, as the net change in employment in April severely disappointed expectations and the labor market participation rate fell to a 12-year low. Statics Canada also reported on Friday morning that the unemployment rate remained at the 5-year low of 6.9%.

In April, the Bank of Canada sounded neutral on the next direction of a rate move, despite cutting its growth target for 2014 and conceding to below target inflation until 2016. The BoC reiterated in April that future policy depends on incoming data; therefore, disappointing employment data could push the central bank to adopt more accommodative monetary policy, which would be bearish for the Canadian Dollar.

USD/CAD 1-Minute: May 9, 2014

Canadian Dollar Tumbles on Severely Disappointing Employment Data

USD/CAD rose to a 3-day high at 1.0916 following the release, and Senior Technical Strategist says

channel support for USD/CAD crosses above 1.0785 on Friday.

USD/CADDaily by Jamie Saettele

Canadian Dollar Tumbles on Severely Disappointing Employment Data

Charts created by Baruch Spier and Jamie Saettele using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .

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

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