USDCAD news
Canadian employment change 0.2K vs. 20.0K forecast
Canadian employment change rose less-than-expected last month, official data showed on Friday.
n a report, Statistics Canada said that Canadian employment change rose to a seasonally adjusted 0.2K, from -9.4K in the preceding month.
Analysts had expected Canadian employment change to rise 20.0K last month.
USD/CAD rises near 3-month highs after Canadian data
The U.S. dollar rose against its Canadian counterpart on Friday, to trade near three-month highs as concerns over tensions in Iraq and Ukraine supported the safe-haven greenback, while the release of disappointing employment data from Canada dented the loonie.
USD/CAD hit 1.0963 during European afternoon trade, the session high; the pair subsequently consolidated at 1.0959, gaining 0.36%.
The pair was likely to find support at 1.0904, Thursday's low and resistance at 1.1004, the high of May 2.
Risk sentiment weakened after U.S. President Barack Obama on Thursday authorized air strikes in Iraq to put an end to an onslaught by Islamic militants and begun military air-drops of humanitarian supplies to besieged religious minorities to prevent a "potential act of genocide".
Market participants also continued to monitor developments between the U.S. and Russia, as Moscow decided on Thursday to ban imports of most food from the West in retaliation against sanctions against it over Ukraine.
Visiting Kiev this week, NATO's secretary general says that Moscow has massed troops on the country's border with Ukraine in preparation for a possible ground invasion.
In Canada, official data showed that the number of employed people rose by 200 last month, disappointing expectations for an increase of 20,000, after a 9,400 decline in June.
However, the report also showed that Canada's unemployment rate ticked down to 7.0% in July, from 7.1% the previous month, in line with expectations.
The loonie was lower against the euro, with EUR/CAD climbing 0.51% to 1.4673.
In the euro zone, official data earlier showed that Germany's trade surplus narrowed to €16.2 billion in June, from €18.8 billion in May. Analysts had expected the trade surplus to narrow to €17.5 billion in June.
A separate report showed that French industrial production rose 1.3% in June, exceeding expectations for a 1.0% gain, after a decline of 1.6% in May, whose figure was revised from a previously estimated 2.3% drop.
Canada Dollar Drops as Yields Hit Lowest in Year on Jobs
Canada’s dollar declined to almost a three-month low and 10-year bond yields sank to the least in a year as the nation’s employers added fewer jobs in July than forecast, increasing concern the economy is faltering.
The currency weakened for a second day versus the U.S. dollar after Statistics Canada said employment increased by 200 jobs, versus a 20,000 gain projected by economists surveyed by Bloomberg News. The unemployment rate fell to 7 percent, from 7.1 percent, as people left the labor market.
The loonie’s decline “is an appropriate response,” Greg Anderson, head of global foreign-exchange strategy at Bank of Montreal, said in a phone interview. “Seeing full-time job loss, and people giving up and leaving the labor force, is disappointing.”
The loonie, as the Canadian currency is nicknamed for the image of the aquatic bird on the C$1 coin, depreciated 0.5 percent to C$1.0973 per U.S. dollar at 5 p.m. in Toronto after touching C$1.0986 on Aug. 6, the weakest since May 5. One loonie buys 91.13 U.S. cents.
Canada’s dollar weakened 0.5 percent in the past five days, its third weekly decline.
The yield on Canada’s benchmark 10-year bond fell one basis point, or 0.01 percentage point, to 2.07 percent after touching 2.03 percent, the lowest since June 2013. It fell five basis points this week and is down from a 2014 high of 2.80 percent on Jan. 2.
USD/CAD weekly outlook: August 11 - 15
The U.S. dollar strengthened against the Canadian dollar on Friday after data showed that the Canadian economy added fewer-than-expected jobs in July, underlining concerns over the outlook for economic growth.
USD/CAD was up 0.45% to 1.0973 late Friday, from 1.0908 ahead of the release of the jobs report.
The pair is likely to find support at around the 1.0900 level and near-term resistance at 1.0985, Wednesday’s high and a three month peak.
Statistics Canada reported that the economy added just 200 jobs last month, falling well short of expectations for jobs growth of 20,000. The unemployment rate ticked down to 7.0% from 7.1% in June.
The report contrasted with recent economic data indicating that the economic recovery in the U.S. is deepening.
Concerns over rising geopolitical tensions continued to dominate market sentiment after the U.S. launched airstrikes in Iraq, in a bit to halt the advance of extremists in the country’s north. A breakdown in the ceasefire between Israel and Gaza also fuelled widespread risk aversion.
However, fears over hostilities between Russia and Ukraine eased on Friday after Russia’s defense ministry said it had concluded military exercises it was holding close to the border with Ukraine.
In the week ahead, investors will be continuing to monitor geopolitical risk. Markets watchers will also be looking ahead to Wednesday’s U.S. report on retail sales, as well as reports on Canada’s hosing sector.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday as there are no relevant events on this day.
July 2014 Housing Starts in Canada
The trend measure of housing starts in Canada reached 189,784 units in July compared to 185,952 in June, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR)1 of housing starts.
“The trend in construction has increased modestly in recent months due to in large part to multiple starts, which have strong variability from month-to-month,” said Bob Dugan, CMHC’s Chief Economist. “Nevertheless, CMHC continues to expect a soft landing for the new home construction market in Canada.”
CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multiples segment of the markets which can be quite variable from one month to the next.
The standalone monthly SAAR was 200,098 units in July, a slight increase from 198,665 in June. The SAAR of urban starts was essentially stable at 182,932 units. Multiple urban starts in July decreased to 115,870 units while the single-detached urban starts segment increased to 67,062 units.
In July, the seasonally adjusted annual rate of urban starts increased in Atlantic Canada and Ontario, and decreased in the Prairies. Modest decreases were also observed in British Columbia and Quebec.
Rural starts2 were estimated at a seasonally adjusted annual rate of 17,166 units.
Preliminary Housing Starts data is also available in English and French at the following link: Preliminary Housing Starts Tables
As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.
1 All starts figures in this release, other than actual starts and the trend estimate, are seasonally adjusted annual rates (SAAR) — that is, monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels. By removing seasonal ups and downs, seasonal adjustment allows for a comparison from one season to the next and from one month to the next. Reporting monthly figures at annual rates indicates the annual level of starts that would be obtained if the monthly pace was maintained for 12 months. This facilitates comparison of the current pace of activity to annual forecasts as well as to historical annual levels.
2 CMHC estimates the level of starts in centres with a population of less than 10,000 for each of the three months of the quarter, at the beginning of each quarter. During the last month of the quarter, CMHC conducts the survey in these centres and revises the estimate.
Canada Says Error in Last Job Report to Be Fixed Aug. 15
Statistics Canada will re-publish its flagship labor market report in two days after finding an error in the most recent edition, a move economists said may hurt its reputation.
The agency said yesterday it will re-release July’s employment data on Aug. 15 at 8:30 a.m. in Ottawa. The original report published Aug. 8 said Canada added 200 jobs during the month, compared with a consensus forecast of 20,000, and that 35,400 people left the labor force.
“It’s very unusual for them to restate and not just revise at the next release,” Blake Jespersen, managing director of foreign exchange in Toronto at the Bank of Montreal, said by e-mail. “The market is taking this as a sign that the number was understated.”
The monthly labor report is among the most watched economic indicators, often moving the currency, because it’s seen by traders as a barometer of the economy’s health and can signal changes in the level of interest rates. News of the botched release adds uncertainty to today’s C$3.4 billion ($3.1 billion) sale of federal government two-year bonds.
Canada’s dollar erased losses and bond yields rose after Statistics Canada’s notice was distributed at around 2 p.m. New York time, and the old report was removed from the agency’s website. Statistics Canada didn’t outline the cause of the “processing” error in a statement and an official declined to elaborate in a telephone call with Bloomberg.
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