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05/07/24
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CAD Flat as Job Growth In US, Canada Falls
On Friday, the Canadian dollar showed little movement and USD/CAD traded at about 1.3618, 0.05% higher for the day in the North American session.
The US and Canada released employment data on Friday and the Canadian dollar showed nearly no reaction.
In June, the labor market in Canada contracted and decreased by 1.4K. This came after May’s gain of 26.7K and was much lower than the 22.5K gain market estimate. The unemployment rate increased from 6.2% in May to 6.4% and was higher than the 6.3% market estimate.
In June, wage growth climbed from 5.2% to 5.6% and was also higher than the 5.3% market estimate.
Although the Bank of Canada will be happy with the job data, the sharp increase in wages may complicate its plans to cut interest rates.
The BoC reduced rates in June, the first major central bank to do this. The Bank wants to see the economy cooling further and inflation declining more before it will feel confident enough to deliver a second rate cut.
In June, the US economy added 206K jobs, higher than the market consensus of 190K. The reading for May was revised down sharply from the initial 272K and the April data was also revised down.
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