The Canadian labor force edged up but the unemployment slightly increased : according to the January 5th report, the employment grew by 18,000 during December 2011.
Despite the increase in employment the rate of unemployment slightly increased by 0.1 percent points as it reached 7.5% (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 increase throughout the day; the sharp increase in the U.S. labor force in December may also help further drive up the USD/CAD exchange rate. Currently the US dollar to Canadian dollar is traded at 1.0231 – a 0.33% increase as of 16:51 (GMT).
The table below presents the announcements of the Canadian labor report in 2011-2012, and the change in Canada’s employment (column A); Canada’s unemployment rate (column B), and the daily percent change on the day the report was published for USD/CAD (column D). The linear correlation of USD/CAD and Canadian labor report news is strong and negative (but not significant), i.e. as the report shows an increase in the Canadian labor force, the USD/CAD tends to decline (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 positive effect on the USD/CAD.
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