USD/CAD Drops on Excellent Canadian Job Figures
Posted on July 9, 2010 by Yohay
Filed Under Forex News, Forex Opinions | 5 Comments
Canadian unemployment rate fell to 7.9% and 93,200 jobs were gained. This huge surprise sends USD/CAD way down below the support line.
Early expectations saw the unemployment rate unchanged at 8.1%, as it didn’t change last month. Not only did it fall, but it dropped below the round number of 8%. And similar to the leap two months ago, the employment change figure showed a whopping gain of 93,2o0 jobs, more than 5 times the early expectations.
An immediate impact was seen on USD/CAD:
USD/CAD traded at 1.0420 before the release, and struggled with breaking below 1.04. The release sent the pair down to 1.0350, an instant fall of 70 pips, and the move is still on. The next line of support is 1.02, which was the 2009 low and also served as a strong line of support and resistance recently.
This is the sixth month of job gains in Canada, with the last two months being very strong:
Two months ago, Canada saw a huge leap in jobs – 108.7K, more than five times the early expectations. Not only that no correction was seen, last month’s figures also exceeded expectations with a rise of 24.7K jobs, better than 16.8K that was predicted.
The unemployment rate, that dropped to 8.1% two months ago, remained at this level also last month. Even with the recent drop in the American unemployment rate to 9.5%, the gap is still very significant.
Earlier this week, USD/CAD was still trading at a higher range, between the support line of 1.0550 and 1.0680. The loonie suffered from weak data, that kept the pair high. Canadian building permits dropped sharply by 10.8%. While this is always a volatile indicator, the drop was sharp and hurt the loonie.
Also the important Ivey PMI dropped from 62.7 to 58.9 points, when expectations stood on a rise. This added to the disappointment.
But later in the week, weak American figures sent the pair below 1.0550 and towards 1.04, which is a strong line of support, that the pair didn’t manage to break.
This isn’t the last Canadian figure this week – housing starts, which unexpectedly dropped to 189K last month, are predicted to recover and rise back up to 193K.
Ready to connect with real Forex traders? Currensee is the first Forex trading social network.
Enjoyed the post? You may want to subscribe by RSS feed or Email.Tags: canadian dollar,Employment Change,loonie,Unemployment Rate,USD/CAD
Comments
5 Responses to “USD/CAD Drops on Excellent Canadian Job Figures”
Leave a Reply
Popular Forex Posts
Daily FX Headlines- EURUSD Remains Capped by the 20-Day SMA Ahead of the ECB Rate Decision September 1, 2010
- EUR/USD: Trading the Change in U.S. Pending Home Sales September 1, 2010
- A Sudden Burst of Optimism that will Come Back Down to Earth September 1, 2010
- EUR/USD May Become Scalping Target Ahead of ECB Decision. September 1, 2010
- British Pound Pivot is 15600 September 1, 2010
-
Stay up to date!
-
-
[...] Excellent employment figures on Friday gave a huge boost to the loonie. It seems that the Canadian economy is doing well, regardless of oil prices. Let’s start: [...]
[...] Excellent employment figures on Friday gave a huge boost to the loonie. It seems that the Canadian economy is doing well, regardless of oil prices. Let’s start: [...]
[...] Canadian dollar continued enjoying the superb employment figures that we’ve seen in the previous week. It will be interesting to see how jobs impact the rate [...]
[...] data: Published on Friday at 11:00 GMT. After a huge leap of 93,200 jobs last month, a very modest rise of 10,300 jobs is expected this time, in the employment change figure. The [...]
[...] Last month’s figures were superb. Employment Change showed a gain of 93,200 jobs, more than a five-fold of early expectations. Also the unemployment rate was a huge surprise, dropping under 8% for the first time in almost a year and a half. [...]