Canadian Jobs Report Strengthens CAD Against USD
The Canadian dollar gained some ground against the US dollar, moving from 0.7430 to 0.7445 after jobs report data.
The Canadian jobs report released Friday, trailing behind the US jobs report for earlier in the month. We have seen minor movement from the CAD/UD pairing as a result, but we may see even more in the coming days as more of the data is analyzed and numbers are crunched by investors. The US dollar was weak in some areas, which helped the CAD/USD pairing become more favorable throughout the week.
The big news is that the Canadian unemployment rate fell, moving from 5.8% to 5.7% for January. New jobs were added at much higher numbers than the expected estimate of 15,000. Instead, an impressive 37,000 positions were filled, showing a strengthening economy that may boost the value of the Canadian dollar as the year continues.
Even wages increased, with the Average Hourly Wages moving up 5.3% over the last year, making Canada more appealing for its citizens and for foreign nationals.
What This Means for the Canada Dollar
Hopes are high for the Canadian economy as it keeps moving way from post-pandemic recession to a place of strength. Workforce participation is decent in Canada, with a 65.3% participation rate through January 2024.That is down very slightly from the previous month, but the difference is considered negligible. The population of those aged 15 years and older is on the rise, which could mean greater participation in the next few years.
Employment gains across the country will help the country’s economy to improve, driving up GDP and other important factors that contribute to the value of the Canadian dollar.
Most gains are minimal, with different work sectors reporting increases of 1% or slightly more, but those will have a knockdown effect in time and contribute to a stronger overall economy by the end of the year. Because the gains are mostly minor across the board, the Canadian dollar should not move very much over the next few months. The change will be incremental, making for a slow burn investment.
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