U.S. Employment Data Mixed
All eyes were on U.S. job numbers on Thursday, and the results were a mixed bag. For a second straight month, the nonfarm payrolls release was higher than expected. The gain of 4.8 million jobs easily beat the estimate of 3.03 million. The unemployment rate fell to 11.1%, down from 13.3% beforehand. Jobless claims dropped slightly to 1.42 million, higher than the estimate of 1.35 million. The fly in the ointment was wage growth, which declined by 1.2%, missing the forecast of -0.8%. The numbers did not cause much of a stir on the currency markets and USD/CAD has shown limited movement in Thursday trade.
Canadian Dollar Continues to Impress
The Canadian dollar posted strong gains in the second quarter, to the surprise of many. After sustaining losses of 4.9% in March, many analysts wrote off the Canadian dollar, with one major bank sending a research note to its clients that said there was not one reason to purchase Canadian dollars. The currency has defied the naysayers and rebounded in impressive fashion, with USD/CAD falling by 3.5% in Q2. The loonie has gained ground this week, despite a June GDP release of -11.6%. The Canadian economy may not be in good shape, but investors are clearly concerned about the health of the U.S. economy, which has buckled under the wake of the COVID-19 pandemic. Barring a sudden deterioration in the Canadian economy, the Canadian dollar could continue to make inroads against its U.S. cousin.
