USD/CAD Falls From Resistance on Lower Unemployment Rate

The Canadian economy gained 22,300 jobs in May, within expectations. A significant surprise to the upside came from the unemployment rate, which fell once again, from 7.6% to 7.4%. USD/CAD, which was challenging resistance before the release, is now heading down.

While the gain of over 22K was expected, it is important to note that this is still a strong number. The improvement shows that at least for now, Canada continues to do better than the US, on which it is dependent.

USD/CAD now trades at 0.9715, down from nearly 0.9750 before the release. The next stop on the way down is 0.9667.

Canadian job numbers were great last month. Canada saw a gain of 58,300 jobs, much better than expected and also a very high number indeed. Also the unemployment rate surprised by falling to 7.6%.

Expectations this time were for the same unemployment rate and a much more modest gain of 22,000 jobs.

USD/CAD was trading yesterday at the higher range of 0.9750 to 0.9816. It later fell to the lower 0.9667 to 0.9750 range, and towards the release, it made signs of breaking higher.

For more on the loonie, see the Canadian dollar forecast.

Earlier in the week, Canadian building permits disappointed with a big plunge of 21.1%. On the other hand, the highly regarded Ivey PMI rose to 69.1 points, much higher than expected. Housing starts rose to 184K, as expected, and the trade balance disappointed and turned negative. All in all, a somewhat lower leaning week of economic indicators for the loonie.