A Decline in Full-Time Employment Drives the Canadian Dollar Lower

Talking Points:

• Canadian net change in employment rises by 25.8K
• Full time employment falls for the second month
• CAD/JPY falls to a weekly low

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The Canadian Dollar declined in Forex markets as full-time employment fell for the second consecutive month in May. The net change in employment rose by an additional 25.8 thousand additional jobs, which beat expectations, but the gain in employment was fueled by part-time jobs. Statistics Canada also reported that the unemployment rate rose back to 7.0% following two months of 6.9% unemployment.

Earlier this week, the Bank of Canada maintained a neutral tone on the direction of its next rate change, citing inflation remaining below target. The BoC also considers the strength of the economy and employment before changing the target interest rate, therefore the continued decline in full-time employment may discourage the central bank from tightening monetary policy.

CAD/JPY 1-Minute: June 6, 2014

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That’s why the Canadian Dollar declined over 20 pips against the Yen following the release and set a new weekly low at 93.43. In the more popular USD/CAD pair, Technical Strategist Jamie Saettele says the next bull leg may be underway with support near 1.0880.

USD/CADDaily by Jamie Saettele

Charts created by Baruch Spier and Jamie Saettele using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to [email protected] .