Canadian dollar strengthens on job creation

The Loonie has advanced against the US dollar today, as a rebound in Canadian labour data contrasted with a disappointing US jobs report.

The Canadian dollar strengthened against most commonly-traded currencies today, after Statistics Canada revealed an improvement in the unemployment rate and a healthy number of jobs being created in its January Labour Force Survey.

Canadian employment increased by 29,400 in January after declining 44,000 in December (revised to a smaller decline than the previously reported 45,900), while the unemployment rate nudged down to 7.0% from 7.2%. Part-time jobs decreased by 21,100 but this was more than offset by an encouraging 50,500 rise in full-time positions.

Both Canada and the US had shockers in their December employment reports, but the difference is that Canada’s data today bounced back comfortably enough for the previous month’s data to look like an aberration.

Alongside the 113,000 jobs created in the US in January, December’s 75,000 starts to look less anomalous and instead raises questions of whether US employment is sputtering just as the Fed begins to ease off the gas pedal.

The strength of the latest Canadian employment data has dampened speculation that the Bank of Canada might soon be prompted to cut rates by softness in its economy. By mid-afternoon in New York, USD/CAD was down 0.35% at 110.30.

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