The Canadian labor force showed an improvement after the employment remained nearly unchanged in the past couple of months: according to the October 7th report, the employment grew by 61,000 (update: U.S. employment grew by 103k in September).
This increase in employment reduced the rate of unemployment by 0.2 percent points as it reached the lowest level in 2011 of 7.1% (see chart below).
This news is likely to keep the USD/CAD low and drive it down throughout the day, unless there will be any major surprises from the U.S. labor report to be published later on today. Currently the Canadian dollar to US dollar is traded at 1.0338 – a 0.3158% decrease as of 13:03 (GMT).
The table below shows the dates of the announcements of the Canadian labor report, the change in employment (column A); the rate of unemployment (column C), and the daily percent change on the day the report was published for USD/CAD (column D). Column B gives 1 for good news from the labor report (i.e. employment grew above 20k) and 0 for bad news (below 20k). The linear correlation of USD/CAD and Canadian labor report news shows strong negative correlations, i.e. as the report shows good news, the USD/CAD falls (the Canadian dollar appreciates against the USD).
These correlations aren’t significant, but provide an indicator that the news on the Canadian labor force is likely to have a negatively effect on the USD/CAD even in these uncertain times.
For further reading:
Monthly Analysis and Outlook: