Canada’s employment data released today was much better than forecasts, but the performance of the Canadian dollar was largely driven by the market sentiment. As a result, the loonie gained against the extremely weak euro, but fell versus safe currencies, such as the US dollar and the Japanese yen.
Statistics Canada reported that Canadian employers added 54,100 jobs in July. That was a far bigger figure than 17,500 predicted by forecasters and 31,800 registered in the previous month. Looking deeper into the report, though, reveals that the situation was not as good as it might seem at the first glance. The increase was solely due to the rise of part-time employment, while the number of full-time jobs actually dropped. Returning to positive facts, the unemployment rate fell from 6.0% to 5.8%, below the median forecast of 5.9%.
Another positive factor for the Canadian currency was the rally of crude oil during the Friday’s trading session. Crude gained more than 1% on concerns that US sanctions against Iran can hurt global oil supply.
Yet all the positive news were overshadowed by fears about impact of US sanctions against Turkey on European markets. As a result, safer currencies, like the greenback and the yen, profited while riskier currencies linked to commodities were under pressure.
USD/CAD jumped from 1.3050 to 1.3137 as of 16:48 GMT today. EUR/CAD dropped from 1.5041 to 1.4968, and its daily low of 1.4916 was the lowest since January 10. CAD/JPY sank from 85.10 to 84.25.
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Canadian Dollar Mixed Despite Amazing Employment Report
