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Loonie soars on jobs galore
Michael O’Neill
FX Trader, Loonieviews.net
Summary: Today's Canadian jobs print was a blockbuster, with 106,500 new positions added in April – the largest employment rise in the country's history.
USDCAD plunged on news that the Canadian economy added a jaw-dropping 106,500 jobs in April. Analysts were only expecting a gain of 10,0000. The details were rosy as well, including the creation of 73,000 new full-time jobs. The unemployment rate dipped to 5.7%.
The Canadian economy has created an average of 55,400 jobs since the start of the year. Today’s data add much-needed support to Bank of Canada forecasts predicting a rebound in the domestic economy in H2'19.
The Canadian economy has created an average of 55,400 jobs since the start of the year. Today’s data add much-needed support to Bank of Canada forecasts predicting a rebound in the domestic economy in H2'19.
USDCAD is the worst-performing G10 currency pair since New York opened, falling from 1.3456 to 1.3386 as of 13:45 GMT. The USDCAD price action suggests weak long dollar positions are getting flushed. The break of support at 1.3440 snaps the uptrend line intact since the middle of April and break of 1.3370 targets 1.3330 and then the long term uptrend line in the 1.3225-50 area.
The US dollar has been on the defensive since the New York open and today’s mildly disappointing US inflation numbers didn’t help matters. Headline April CPI rose 0.3% rather than the 0.4% predicted while Core CPI rose just 0.1% (forecast 0.2% ) Today’s data ensured the Federal Reserve would have a comfortable seat on the sidelines.
The inflation data didn’t do much to bolster Wall Street’s confidence. The three major indices are lower in early trading and in the absence of news of a US/China trade deal today, will likely finish the week with losses.
Traders are focused on the US/China trade talks with many believing enough progress will be made to allow Trump to cancel the tariff hike. China seems to be in that camp as it hasn’t announced any retaliatory measures.
The US dollar has been on the defensive since the New York open and today’s mildly disappointing US inflation numbers didn’t help matters. Headline April CPI rose 0.3% rather than the 0.4% predicted while Core CPI rose just 0.1% (forecast 0.2% ) Today’s data ensured the Federal Reserve would have a comfortable seat on the sidelines.
The inflation data didn’t do much to bolster Wall Street’s confidence. The three major indices are lower in early trading and in the absence of news of a US/China trade deal today, will likely finish the week with losses.
Traders are focused on the US/China trade talks with many believing enough progress will be made to allow Trump to cancel the tariff hike. China seems to be in that camp as it hasn’t announced any retaliatory measures.
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