CAD Price Analysis & News
- Canadian Employment Change 259.2k vs Exp. 75k
- Unemployment Rate Drops 1.2ppts to 8.2%
- US Dollar Falls
BOTTOM LINE: A very strong employment report, adding to the slew of data that has surpassed the Bank of Canada’s forecasts. The headline rate rose 259.2k, topping expectations of 75k, while this was led by the part-time jobs increase, there was also good gains in full-time employment. Meanwhile the unemployment rate fell to 8.2%, significantly below expectations of 9.2%. Reminder that earlier in the week, the BoC had acknowledged that the rebound in the economy had been stronger than what they had expected, however, remained cautious given the uncertainty over the outlook. That said, with data as strong as today’s this will undoubtfully raise expectations that the BoC will be one step closer to looking at tapering QE.
MARKET REACTION: CAD Strengthens Across The Board
As to be expected from a stellar jobs report, the Canadian Dollar rose across the board with USD/CAD falling to fresh intra-day lows. A similar reaction had been observed in CAD crosses with CADJPY testing 87.00. In turn, while this is likely to underpin the Canadian Dollar, my preferred play would be against the Euro and AUD. The sentiment in the Euro remains soft with the German Health Agency stating that a third coronavirus wave could be taking shape. Italy have announced that a one month nationwide lockdown take place from mid-March, which comes at a time where the EU have faced headwinds pertaining to their vaccine rollout program. Alongside this, the ECB have announced that they will significantly increase the pace of PEPP purchases over the next quarter.
DATA OVERVIEW: DailyFX Economic Calendar
Source: DailyFX
