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Good news from Canada:  only 6.4K people left the workforce, better than expected. The unemployment rate dropped to 6.8%, but that’s thanks to a slide in the participation rate from 65.9% to 65.8%.

USD/CAD is falling from the 1.27 level all the way to 1.2665. Support awaits at 1.2660. In general, the pair is erasing the big gains it  enjoyed earlier in the week.

More good news come from the internals: full time employment jumped 64.8K and this leap was balanced with a bigger drop in part time employment.

Canada was expected to report a drop of 10K jobs in June after an impressive gain of 58.9K in May. The unemployment rate carried expectations for a rise from 6.8% to 6.9%. The participation rate in May was 65.9%.

USD/CAD was trading around 1.27 towards the publication, flirting around this level.

Earlier in the week, the loonie was hit hard by various reasons. The most notable driver was the price of oil, Canada’s critical export. While it didn’t reach the cycle highs of 1.2834, the pair didn’t get too far from that  critical zone.

Next week, we have a rate decision from the Bank of Canada. What can we expect? The team at Goldman sees a dovish surprise.

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