Loonie Climbs As Robust Canadian Jobs Data Backs Rate Hike Hopes
July 07 2017 - 05:03AM
RTTF2
The Canadian dollar climbed against its key counterparts in the
early New York session on Friday, as upbeat Canadian jobs data for
June raised the possibility of a Bank of Canada rate hike next
week.
Data from Statistics Canada showed that Canadian economy added
45,300 jobs in June, after an increase of 55,000 jobs in
May.
Economists had forecast a job growth of 10,000.
The unemployment rate was 6.5 percent,
down 0.1 percentage points from 6.6 percent last
month. The rate was expected to be unchanged.
Strong jobs report ramped up bets for a rate increase by the
Bank of Canada when it meets next week.
The loonie fell against its most major rivals in the Asian
session amid risk aversion and falling oil prices.
Extending early gains, the loonie spiked up to a 6-month high of
88.36 against the Japanese yen, from a low of 87.13 hit at 5:00 pm
ET. The loonie is poised to find resistance around the 90.00
area.
Preliminary data from the Cabinet Office showed that Japan's
leading index strengthened in May, while coincident index fell from
April.
The leading index that measures the future economic activity,
rose to 104.7 in May from 104.2 in April. The score was forecast to
rise to 104.6.
Reversing from an early weekly low of 1.4835 against the euro,
the loonie firmed to 1.4679. The next possible resistance for the
loonie is seen around the 1.43 mark.
Data from Destatis showed that German industrial production grew
at the fastest pace in four months in May.
Industrial production grew 1.2 percent month-on-month in May,
faster than the 0.4 percent increase seen in April and exceeded
economists' forecast of 0.2 percent.
Having dropped to a 2-day low of 1.2994 against the greenback at
1:45 am ET, the loonie strengthened to a 10-month high of 1.2886.
Further uptrend may take the loonie to a resistance around the 1.26
level.
Data from the Labor Department showed that U.S. employment
increased much more than expected in the month of June.
The report said non-farm payroll employment jumped by 222,000
jobs in June following an upwardly revised increase of 152,000 jobs
in May.
Bouncing off from an early 2-day low of 0.9870 against the
aussie, the loonie hit a 6-month high of 0.9790. If the loonie
continues rally, 0.96 is seen as its next resistance level.
Looking ahead, Canada Ivey PMI for June is due shortly.
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