- The Canadian Dollar shed 0.4% against the Greenback on Friday.
- Canada saw a worse-than-expected print in net new jobs additions in October.
- Average Canadian wages also rose, maintaining upward pressure on inflation expectations.
The Canadian Dollar flubbed a near-term technical recovery on Friday, slumping back into familiar lows against the Greenback. The Loonie remains under pressure as the Bank of Canada (BoC) continues to keep downward pressure on interest rates in the face of lagging employment figures, though the Canadian central bank is quickly running out of runway as rising wages keep inflation expectations simmering in the background.
Canada reported a much lower than expected print in Net Change in Employment in October, entirely missing the mark as job gains continue to wither. Canadian Average Hourly Wages also rebounded, reminding investors of Canada’s ongoing battle with still-high inflation expectations despite overall price growth well outpacing wages across the gamut of timeframes.
Daily digest market movers: Canadian Dollar backslides on missed jobs growth
- Canadian Net Change in Employment rose by a scant 14.5K in October, missing the forecast 25K and well below September’s 46.7K print.
- Average Hourly Wages also grew 4.9% YoY in October, rebounding from September’s slowdown to 4.5%.
- With wages back on the rise, inflation expectations are likely to remain elevated, crimping the BoC’s hopes to single-handedly restart Canada’s growth engine using steep interest rate cuts.
- The US Consumer Sentiment Index also rose on Friday, with November chalking in an upswing to 73.0 in aggregated consumer survey results. Markets anticipated a much more moderate upswing to 71.0 from the previous 70.5.
- Despite a wider miss in Canada’s jobs figures for October, the Canadian Unemployment Rate held steady at 5.5% versus the forecast uptick to 6.6%. However, the on-balance Unemployment Rate print is likely due to long-term unemployed workers dropping out of the unemployment reference period as the Canadian Labor Force Participation Rate continues to sink below 65%.
- Canada’s LFPR last printed at 64.8%, and hasn’t been this low since the global recovery from the COVID pandemic in mid-2020.
Canadian Dollar price forecast: Loonie remains sticky near familiar lows
The Canadian Dollar (CAD) continues to churn chart paper close to medium-term lows against the US Dollar. USD/CAD marched to 14-month highs near 1.3960 earlier in November, and a sputtering technical recovery in the Canadian Dollar coupled with a broad-market strengthening of the Greenback has kept the pair bolstered north of the 1.3900 handle.
USD/CAD daily chart
Economic Indicator
Net Change in Employment
The Net Change in Employment released by Statistics Canada is a measure of the change in the number of people in employment in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending and indicates economic growth. Therefore, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.
Last release: Fri Nov 08, 2024 13:30
Frequency: Monthly
Actual: 14.5K
Consensus: 25K
Previous: 46.7K
Source: Statistics Canada
Canada’s labor market statistics tend to have a significant impact on the Canadian dollar, with the Employment Change figure carrying most of the weight. There is a significant correlation between the amount of people working and consumption, which impacts inflation and the Bank of Canada’s rate decisions, in turn moving the C$. Actual figures beating consensus tend to be CAD bullish, with currency markets usually reacting steadily and consistently in response to the publication.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
