To start the week, CAD would have been looking to attempt to brush off some of the damage caused by last weeks poor performing data. It did start on the front-foot gaining modestly on the USD on Monday. But reports suggest that it did hold onto much of the losses that were inflicted through last Friday’s exposure to the drastic slump in domestic jobs which suggested the Canadian economy was not a stable as the Bank of Canada previously had hoped.
Last Weeks Data Casts a Heavy Shadow on the Canadian Dollar
Last week, particularly last Friday was a negative way to finish the week for the ‘Loonie’. The Canadian jobs market lost 71,200 net positions in November whilst the rate of unemployment rose to a figure of around 5.9%. This figure was the highest in more than a year. Analysts had previously predicted a forecast of a gain of around 10,000 jobs, so when this news hit of a sharp decline, the market was sent into shock, tumbling CAD to 1.3269 to the USD. Monday also saw the release of data concerning Canadian housing. The situation appears bleak and has not done CAD any favours. Statistics Canada highlighted that the value of Canadian building permits fell by around 1.5% in October from the month before. Analysts had expected an increase of 3.0%, which similar to the jobs data was an unpredicted surprise – and a negative one at that.
Canada Looks to Claw Back Some of Its Previous Gains in the Market
On Monday, CAD managed to regain some ground in the trading market, enabling it to trade at around CA$1.3251. The Bank of Canada is optimistic about the future of the employment picture for Canada, even off the back of Friday’s shock data. Deputy governor Timothy Lane suggested that the labour market has been underpinning the economy. For Canada, the BoC’s governor Stephen Poloz is due to speak on Thursday. Poloz is stepping down from his position when his mandate expires in June, which the market had previously expected to happen.
CAD will be hoping for optimism from governor Poloz on Thursday. He will discuss the Canadian economy and investors will be hoping that the BoC has a positive forward drive to boost the economy. Following the negative jobs and housing figures, CAD will be looking for anything to give a boost in order to gain back ground close to the other major currencies.
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