THE TAKEAWAY: [U.S. trade deficit narrowed more than forecast in December; Canada’s employment fell for the first time in 6 months] > [ US exports of petroleum hit the record high;Jobs declined in manufacturing and education in Canada] > [USD/CAD Bullish]
The U.S. Department of Commerce issued a report this morning revealing that the U.S. trade deficit narrowed more than forecast in December, as sales of petroleum to overseas jumped to the highest level on record. The trade deficit shrank by 20.7 percent to $38.5 billion in December, lower than the consensus projection surveyed by Bloomberg News. 73 economists had called for a decrease in the trade deficit to $46.0 billion. November’s balance was revised downwards to a deficit of $48.6 billion from $48.7 billion initially reported.
Imports advanced to $2.74 trillion by 2.7 percent in December, while exports climbed to a record $2.2 trillion by 4.4 percent. The surge in the value of trade balance resulted from the increasing overseas demand for fuel and the fewest purchases of imported crude since August 2009.Today’s figures provide an improved outlook for the region as business confidence is likely to continue in the following periods.
Another report released today shows that Canadian employment dropped for the first in six months in January as hiring in manufacturing and education declined. According to Statistics Canada, the employment fell by 21,900 in January following a gain of 31,200 jobs in December. The median forecast surveyed by Bloomberg News had projected a rise of 5,000 new jobs. As the same time, Canada’s jobless rate fell to 7.0 percent from 7.1 percent. Job decline was led by losses in education and manufacturing sectors dropping by 30,900 and 21,600 separately. Also, the Federal government has been reducing its workforce due to budget constraints.
USD/CAD 1-minute Chart: February 8, 2013
Chart created using Market Scope – Prepared by Renee Mu
Following the data release, the US dollar jumped against its Canadian peer. As can be seen from the one-minute chart above, the USDCAD pair rallied to C$1.0022 from 1.0004. At the time of this report, USDCAD was trading higher at C$1.0025.
--- Written by Renee Mu DailyFX Research