USDCAD Jumps On Weaker Employment form Canada

USDCAD has been trading in a 2 cent range for 2 months, and yesterday we saw another bounce off the bottom after the soft Canada labour data. The USD ended up down against most major currencies yesterday, but it gained against the Canadian dollar, since the Loonie ended up being the weakest link yesterday.

USD/CAD Chart Daily – The 100 SMA Held the Decline

USD/CAD was finding resistance at 1.36 during Q1 of this year, but the resistance was broken and now it has turned into a support zone. The trading range has moved 2 cents higher, with the resistance zone being around 1.38. This week we saw a pullback in the USD, which sent USD/CAD to the bottom of the range, but the disappointing employment figures from Canada weighed on the CAD, sending this pair 50 pips higher.

Canada’s June Employment Report

  • Canada’s June employment showed a decline of -1.4K jobs, significantly missing the estimate of +22.5K
  • May employment showed a gain of +26.7K
  • June unemployment rate rose to 6.4%, slightly above the expected 6.3%
  • May unemployment rate was 6.2%

Key Points:

  • Employment Change: -1.4K vs. +22.5K expected
  • Unemployment Rate: 6.4% vs. 6.3% estimated (previously 6.2%)
  • Full-Time Employment: -3.4K (previously -35.6K)
  • Part-Time Employment: +1.9K (previously +62.4K)
  • Participation Rate: 65.3% (down from 65.4%)
  • Average Hourly Wages YoY: +5.6% (up from +5.2% last month)

Additional Highlights:

  • Employment Rate: Fell 0.2 percentage points to 61.1%.
  • Unemployment Rate: Increased by 0.2 percentage points to 6.4% in June and has risen 1.3 percentage points since April 2023.
  • Demographic Changes:
    • Employment fell among young men aged 15 to 24 (-13,000; -0.9%).
    • Employment increased for core-aged women (aged 25 to 54) (+19,000; +0.3%).
  • Industry Changes:
    • Declines in transportation and warehousing (-12,000; -1.1%) and public administration (-8,800; -0.7%).
    • Increases in accommodation and food services (+17,000; +1.5%) and agriculture (+12,000; +5.5%).
  • Regional Changes:
    • Employment declined in Quebec (-18,000; -0.4%).
    • Employment increased in New Brunswick (+3,000; +0.8%) and Newfoundland and Labrador (+2,600; +1.1%).
  • Total Hours Worked: Down 0.4% in June, but up 1.1% year-over-year.
  • Average Hourly Wages: Increased by 5.4% year-over-year in June, following a 5.1% rise in May (not seasonally adjusted).
  • Returning Students Employment Rate: Fell to 46.8% in June from 51.7% a year earlier (not seasonally adjusted).

Overall, the report indicates weaker-than-expected job growth, a rising unemployment rate, and significant changes across various demographics and industries. The increase in average hourly wages and the shifts in full-time and part-time employment also highlight the dynamic changes in the labor market.

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Skerdian Meta
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Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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