Canada’s unemployment rate fell in May from 7.6 percent to 7.4 percent in May. This surprised markets as the forecast was for no change in the figure.
Meanwhile, the change in employment which measures how many jobs were created in the month, showed an additional 22,300 people gained employment last month in the private sector.
Statistics Canada gave a breakdown of the data, which showed a noticeable shift to full-time employment which rose by 32, 900 jobs compared to part-time employment numbers showing a decline of 10,600 jobs added.
The positive news gave a chance for the Canadian Dollar to climb back up after falling on June 1st after the Bank of Canada announced it was maintaining its benchmark interest rate unchanged at 1.0 percent.
A declining unemployment rate shows signs of economic recovery and expectations that the central bank will increase rates in the near future are helping support the Canadian Dollar.
Upon release of the news, the Canadian Dollar jumped 38 pips against the greenback, with USDCAD plummeting to 0.9711 from 0.9749.
Last week the Loonie fell sharply against the greenback after weak U.S. jobs data indicated a slowing U.S. economy which raised concerns for Canadian exporters since the Unites States is a major trade partner, making up for 75 percent of Canada’s exports.