The Canadian dollar has posted slight gains in Tuesday trading. Currently, USD/CAD is trading at 1.3128, up 0.15% on the day. On the release front, Canadian construction data beat expectations. Housing Starts jumped 248 thousand, crushing the estimate of 195 thousand. This marked the highest gain since November. Building Permits followed the same trend, climbing 4.7%, compared to the estimate of 0.1%. This was the strongest gain in four months. The U.S will release JOLTS Jobs Openings, which is expected to climb to 6.88 million.
All eyes are on the Bank of Canada, which holds its monthly rate meeting on Wednesday. The markets are expecting that Bank policymakers will raise rates by a quarter-point to 1.50%, a level not seen since December 2008. BoC Governor Stephen Poloz said that the July rate decision would be based on economic data, and Friday’s strong employment data will be added ammunition in favor of raising rates at the upcoming meeting. The economy created 31.8 thousand jobs in June, well above the estimate of 22.3 thousand. Wage growth also looked strong, as hourly earnings gained 3.5% in June on an annualized basis.
U.S employment data was a mix on Friday, as job growth remained above the 200-thousand level, but wage growth faltered. Nonfarm payrolls dropped to 213 thousand, but this beat the estimate of 195 thousand. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S and China.
