Canadian Dollar Strengthens After Strong Jobs Data
August 10 2018 - 04:54AM
RTTF2
The Canadian dollar spiked up against its major counterparts in
the European session on Friday, as the economy created more jobs
than forecast in July, while the jobless rate fell.
Data from Statistics Canada showed that the employment rose by
54,100 jobs in July, following an addition of 31,800 jobs in June.
Economists were expecting a job growth of 17,000.
The unemployment rate declined by 0.2 percentage points to 5.8
percent from 6 percent. The rate was forecast to fall to 5.9
percent.
Oil prices edged higher after the International Energy Agency
raised its estimate of world oil demand growth next year by 110,000
barrels a day to 1.5 million barrels.
In its monthly oil market report, the IEA said that the new U.S.
sanctions against Iran could make maintaining the world's oil
supply 'very challenging'.
Crude for September delivery rose $0.70 to $67.51 per
barrel.
The loonie showed mixed trading against its major rivals in the
Asian session. While it fell against the yen and the greenback, it
rose against the euro and the aussie.
The loonie spiked up to 0.9527 against the aussie, a level not
seen since June 2016. The loonie is likely to challenge resistance
around the 0.94 level.
The Reserve Bank of Australia trimmed its near-term inflation
forecast but broadly maintained its growth projections.
In its quarterly Statement on Monetary Policy, the forecasts for
domestic output growth were broadly similar to those presented in
the May Statement.
Having fallen to more than a 2-week low of 1.3123 against the
greenback at 4:15 am ET, the loonie reversed direction and bounced
off to 1.3038. If the loonie rises further, 1.28 is likely seen as
its next resistance level.
Data from the Labor Department showed that U.S. consumer prices
showed a modest increase in the month of July.
The Labor Department said its consumer price index rose by 0.2
percent in July after inching up by 0.1 percent in June. The
increase in prices matched economist estimates.
The loonie firmed to 1.4921 against the euro, its strongest
since May 30. On the upside, 1.47 is possibly seen as the next
resistance level for the loonie.
The loonie bounced off to 85.05 against the yen, from more than
a 2-week low of 84.43 touched at 3:45 am ET. The next likely
resistance for the loonie is seen around the 86.00 level.
Data from the Cabinet Office showed that Japan's gross domestic
product expanded a seasonally adjusted 0.5 percent on quarter in
the second quarter of 2018.
That exceeded expectations for an increase of 0.3 percent
following the 0.2 percent loss in the three months prior.
Looking ahead, U.S. monthly budget statement for July is
scheduled for release at 2:00 pm ET.
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