Canadian Employment Ticks Up – USD/CAD Follows

The number of jobs in Canada rose by 7.7K in May, a bit short of predictions. Early expectations stood on a gain of 10K jobs after two excellent months.  The unemployment rate was expected to stand at 7.3%, and this was the result indeed.

USD/CAD ticks up on this small disappointment. The pair rose from 1.0327 to 1.0347 before stabilizing. Bigger shocks were seen in the previous two releases.

Canada saw two wonderful employment reports in previous months: a gain of 58.2K jobs last month, and an astonishing +82.3K beforehand.

In addition, Canadian trade balance disappointed by turning negative – a deficit of 0.4 billion instead of a surplus of 0.2. Last month’s saw a surplus of 0.4 billion according to the initial report. This was now revised down to +0.2 billion.

Trade balance in the US was within expectations: a deficit of 50.1 instead of 49.4 billion. Last month’s deficit was actually wider than initially reported: 52.6 instead of 51.8 billion.

The Canadian dollar enjoyed the improvement in sentiment that characterized the markets this week, and managed to retrace its losses against the greenback. However, Bernanke’s refusal to hint on QE3 reversed some of those gains, and USD/CAD recaptured the 1.03 line.