On Friday the Canadian Dollar plummeted against the Pound and hit fresh multi-year lows against the ‘Greenback’ as domestic employment data fell massively short of expectations, with the Canadian unemployment rate jumping from 6.9 per cent to 7.2 per cent.
Shortly after the shocking employment figures were published, economist Sonja Gulati observed; ‘Not only was the headline contraction in December sizable, but the losses were broad-based across industries and exclusively seen in full time positions.’
Similarly, Canada’s Finance Minister Jim Flaherty viewed the situation as a reminder of the fragility of the Canadian economy.
In a statement Flaherty asserted; ‘We sympathise with those Canadians who lost their job last month. This is a reminder that the economic recovery remains fragile and we must stay focused on our plan to grow the economy and keep taxes low to create the environment where job creation can flourish. It’s also important to remember that monthly job numbers are volatile and our overall trend is positive. Indeed, for 2013 as a whole, Canada’s economy created more than 100,000 net new jobs’.
On Monday, however, the Canadian currency was able to claw back losses against the Pound as the British asset came under fire.
A drop in the UK’s surprise index caused widespread Sterling declines.
The Canadian Dollar continued to trade higher against its European peer even as Canada’s business outlook future sales measure slipped from 31 to 29.
The Band of Canada Senior Loan Officer survey also showed a decline, with the index slipping from -7.3 to -10.8 in the fourth quarter.
As the week progresses additional GBP/CAD movement is likely to occur in response to UK inflation and retail sales reports.
If the retail sales data shows the 0.3 per cent month-on-month gain expected when it’s released on Friday the Pound could end the week on a high.
Canadian reports to watch out over the next five days include Wednesday’s existing home sales figure for December and Thursday’s international securities transactions figure.
Of course, given the impact Friday’s US non-farm payrolls report had on the market, US news will also be of interest ahead of the Federal Open Market Committee meeting at the end of the month.
Current Canadian Dollar (CAD) Exchange Rates:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5623 ,
Canadian Dollar,,US Dollar,0.9204 ,
Canadian Dollar,,Euro,0.6735 ,
Canadian Dollar,,Australian Dollar,1.0160 ,
Canadian Dollar,,New Zealand Dollar,1.1067 ,
US Dollar,,Canadian Dollar ,1.0877 ,
Pound Sterling,,Canadian Dollar,1.7794 ,
Euro,,Canadian Dollar,1.4822 ,
Australian Dollar,,Canadian Dollar,0.9842 ,
New Zealand Dollar,,Canadian Dollar,0.9052 ,
[/table]
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