USDCAD, H1
Canada’s employment grew 15.3k in February after 48.3k gain in January. The increase was contrary to the median (-5.0k), but is not exactly a shock (we saw +20k). Full time employment surged 105.1k after a 15.8k gain, which was the largest gain since May of 2006. Part time fell 89.8k after a 32.4k increase. Good sector employment fell 14.8k while services added 30.1k new jobs. The participation rate fell to 65.8 from 65.9. The unemployment rate declined to 6.6% in February from 6.8% in January. Hours worked fell 0.3% m/m, marking the third straight decline. The average hourly wage pace was tame at 1.3% y/y in February. The report continues the ongoing mix of firm total job growth alongside a lack of hours worked growth and tepid wage growth. The Bank of Canada dismissed the uptrend in total employment as they focused on weak hours worked and weak wage growth to back their view that spare capacity persists in the labour market. This report will not change that view, although we would note that it does further cut the downside risk surrounding the growth outlook for this year. that will prime the markets for a rate hike on Wednesday.
The USDCAD fell following the twin U.S./Canada jobs report, where initial disappointment in the U.,S. outcome combined with a better than expected Canadian result. The pairing fell to 1.3420 lows from 1.3505. Oil prices helped the CAD, with WTI crude reclaiming the key $50 mark, supported by a broad post-jobs report USD sell-off. The fall to a key moving average on the 1 hour chart prompted a LONG position for a retrace and recovery. Entry was confirmed at 1.3437 with a 14 period ATR target set at 1.3455 at time of writing the USDCAD continues to recover towards the target zone.
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Stuart Cowell
Senior Market Analyst
HotForex
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