The Canadian labor force edged down again and the employment declined for the second straight month: according to the December 2nd report, the employment fell by 19,000 during November 2011.
This decrease in employment resulted in an increase in the rate of unemployment by 0.1 percent points as it reached 7.4% (see chart below).
This news is likely to affect forex exchange rate trading in Canada and may further pressure the USD/CAD forex exchange rate to incline throughout the day; the increase in the U.S. labor force in November may also help further drive up the USD/CAD exchange rate. Currently the US dollar to Canadian dollar is traded at 1.0163 – a 0.2388% increase as of 16:29 (GMT).
The table below presents the announcements of the Canadian labor report in 2011, and the change in Canada’s employment (column A); Canada’s unemployment rate (column C), and the daily percent change on the day the report was published for USD/CAD (column D). Column B receives the figure 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 presents a negative relation, i.e. as the report shows a decrease or no growth in the Canadian labor force, the USD/CAD tends to rise (the Canadian dollar depreciates 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 positive effect on the USD/CAD.
For further reading:
- Canadian Employment Fell by 54k in October – November Report 2011
- Canadian Employment Grew by 61k in September – October Report 2011