Canadian Employment Shrinks, CAD Slumps

The number of employed persons in Canada unexpectedly declined last month and the unemployment rate increased more than was anticipated, leading to the slump of the Canadian dollar.

The forecast for the Canadian employment report weren’t optimistic at all, promising the growth of the employment to slow from 60,900 in September to just 16,300 jobs in October. The actual report proved truly disastrous, even compared to the forecast, as the employment shrank by 54,000, almost erasing the gains from the previous month. As a result, the unemployment rate jumped from 7.1 percent to 7.3 percent, while analysts promised it to stay at 7.2 percent. Another report from Statistics Canada was also negative, showing that the building permits decreased 4.9 percent in September from August.

The Canadian dollar suffered from the unfavorable fundamental data, scrapping its two-day rally. In fact, against some currencies (like the euro) the loonie (as Canada’s currency is often nicknamed) dropped in one session more than in the previous two sessions. The concerns about Europe (Greece in particular) wasn’t helpful to the loonie either.

USD/CAD jumped from 1.0077 to close at 1.0185. EUR/CAD climbed from 1.3918 to 1.4124 during today’s trading session and closed at 1.4044. CAD/JPY fell from 77.40 to the closing price of 76.75.

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