Canadian Dollar at Parity with USD on Building Permits
The Canadian dollar matches one American one. The strengthening of the loonie came as a reaction to a great housing report in Canada, and surprisingly not on important employment figures in both countries.
Canadian employment figures leaped by 15.3% – five times the early expectations that stood on a small rise of 3%. This figure was released at 12:30 GMT, the same time as the Non-Farm Payrolls were released in the US.
Non-Farm Payrolls surprised with a gain of 151K jobs, far better than expected. EUR/USD, GBP/USD dropped on this greenback positive news, but the Canadian dollar leaped. The building permits overcame US strength – USD/CAD dropped from 1.0070 to 1.0000 after the release. USD/CAD parity is with us once again.
Earlier today, mixed employment figures shook the Canadian dollar- on one hand, only 3,00 jobs were gained in Canada, weaker than a gain of 14,000 that was expected. But on the other hand, the unemployment rate unexpectedly dropped from 8% to 7.9%. The reaction in USD/CAD was limited choppy trading. The big move came after the building permits were released.
It’s also important to note that oil prices are on the rise – a rise that began after the announcement of quantitative easing in the US – which gave a boost to commodities. As an exporter of oil, Canada and the Canadian dollar enjoy the rising price of oil.
USD/CAD levels below parity are 0.9930 (the 2010 low), 0.98 and 0.97 (levels from 2008). Above, 1.01, 1.02 and 1.0350 will resist a stronger US dollar.
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I remember when I was younger, when I would watch TV and a commercial can on. The product it was promoting always had two prices. The price of the product in US dollars and the cost of the product in Canadian dollars. Now that’s not necessary at all huh?