THE TAKEAWAY: CAD Net Change in Employment and Unemployment Rate (APR) > +12.5K versus +15.0K expected, from -54.5K > Unemployment Rate unch at 7.2% > USDCAD BULLISH
The Canadian Dollar, previously a top performer next to the US Dollar, has fallen back intraday on Friday after the April Canadian labor market report came in softer than anticipated. Although the unemployment rate held at 7.2% and the headline change in jobs figure barely missed expectations (+15.0K) at +12.5K, the decline in the participation rate has traders worrying.
Without the drop in the participation rate, the unemployment rate would have likely ticked higher to 7.3%, underscoring the volatility in the commodity currency labor markets the past several months. Like the Canadian Dollar, the Australian and New Zealand Dollars have seen their participation rates and unemployment rates gyrate the past several months, leading to dovish tones emerging from their respective central banks.
USDCAD 1-minute Chart: May 10, 2013
Charts Created using Marketscope – prepared by Christopher Vecchio
Following the release, the USDCAD initially dropped from 1.0087 to as low as 1.0082, but once the headline figures were digested, within minutes, the pair had surged to 1.0123. At the time this report was written, the USDCAD had steadied to 1.0108.
--- Written by Christopher Vecchio, Currency Analyst
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