AD: Trading the Net Change in Canadian Employment

The Canadian dollar may face increased selling pressures over the next 24 hours of trading as economists forecast employment to fall 35.0K in June, and fears of a protracted economic downturn could weigh on the exchange rate over the near-term as the central bank maintains a dovish outlook for future policy.

Trading the News: Canada Net Change in Employment

What’s Expected

Time of release: 04/09/2009 11:00 GMT, 07:00 EST
Primary Pair Impact : USDCAD

Expected: -35.0K

Previous: -41.8K

Impact Canada’s change in employment had over USDCAD for the past 2 months

May 2009 Canada Unemployment Rate

Employment in Canada plunged 41.8K in May, with the jobless rate rising to an 11-year high of 8.4%, and conditions are likely to get worse as businesses continue to scale back on production and employment following the downturn in global trade. The breakdown of the report showed full-time positions slumped 58.7K from April, with self-employment falling 32.0K, while part-time jobs increased 17.0K during the month. The data foreshadows a weakening outlook for the region as households face a weakening labor market paired with the slump in housing, and conditions may get worse throughout the year a trade conditions falter. As a result, the Bank of Canada continued to hold borrowing costs at the record-low for the second time in June, and pledged to hold the interest rate at 0.25% throughout the first half of 2010 in an effort to stimulate the ailing economy.

April 2009 Canada Unemployment Rate

Labor demands in Canada unexpectedly rose in April, marking the first increase in six months, with employment rising 35.9K from the previous month, led by a 39.4K jump in full-time positions. At the same time, the annual rate of unemployment held steady at the seven-year high of 8.0% for the second consecutive month in April, and the data encourages an improved outlook for the world’s eighth largest economy as policymakers take unprecedented steps to stem the downside risks for growth and inflation. However, as businesses face fading demands from home and abroad, firms may continue to scale back on production and employment throughout the second-half of the year in an effort to lower their cost structure. As a result, the BoC is widely expected to hold the benchmark interest at the record-low of 0.25% and may adopt unconventional measure over the near-term in order to jump-start the economy.