The Canadian dollar rallied to a session high against its U.S. counterpart on Friday, and surged against the euro after some surprisingly good jobs data which showed Canada added more jobs than expected in April.
Beating market expectations of 10,000, the Canadian economy created 58,200 jobs in April. Even though it was less compared to March which saw a whopping gain of 82,300 new jobs, the surprisingly larger than forecast number helped lift market sentiment. The jobs were mostly in full-time employment according to Statistics Canada data.
The unemployment rate came in at 7.3 percent in line with expectations, ticking up from the previous 7.2 percent, but it was only because of an increase in the participation rate in the labour market.
EURCAD dropped from 1.2985 where it was just before the data at 8:30am Toronto time (12:30GMT) , all the way down to 1.2905 within thirty minutes.
USDCAD fell from 1.0039 to 0.9982.
Comments from Sal Guatieri, Senior Economist at BMO Capital Markets:
“It’s a solid report, showing very surprising strength for the second straight month in Canadian jobs. All of the gains were in the private sector as was the case in the past year and most were full time jobs. The only reason the unemployment rate rose was because we saw a nice jump in the participation rate.”
“It certainly raises the possibility of the Bank of Canada moving on interest rates sooner rather than later. It doesn’t really jibe with the economic performance. It looks like Canadian productivity is taking another nose dive.”