The Canadian dollar is directionless on Monday, after ending the week on a high note. In the European session, USD/CAD is trading at 1.2079, down 0.03% on the day.
Canada and the US both released key job numbers on Friday. Canada’s numbers were a disappointment, while US nonfarm payrolls was strong, although it fell short of the consensus.
Canada’s economy shed jobs for a second straight month, as the employment market is becoming more of a concern. The loss of 68.0 thousand in May follows a dismal April, which posted a reading of -207.1 thousand. The May release missed the forecast of -23.5 thousand. As well, the unemployment rate ticked higher to 8.2%, up from 8.1%.
The job numbers south of the border were much more positive, although the data did not quite meet market expectations. Nonfarm payrolls showed a solid gain of 559 thousand. This was shy of the consensus of 650 thousand, but still showed strong expansion and was much higher than the previous reading of just 266 thousand. There was good news on the wage front, as Average Hourly Earnings rose 0.5% in May, up from 0.2%. However, this missed the consensus of 0.7%.
Another employment release on Friday worth paying attention to is the US NFIB survey, which indicated that openings in small businesses jumped to a record high of 48%. This appears to indicate that while the economy is producing jobs, the issue is getting people out of the house and into the workforce. This issue will have to be addressed if the economic recovery is to continue at a strong pace.
USD/CAD Technical
- On Friday, USD/CAD put strong pressure on resistance at 1.2135 but was unable to break through. The next resistance line is at 1.2197
- There are support lines at 1.2009 and 1.1945
