Euro Surges as Bond Buying Program Receives Approval
Aussie Rallies with Global Stocks as Traders Put Their Hopes on Central Banks
Employment Data Boost CAD vs. USD
The Canadian dollar jumped to the highest level in a year against its US counterpart today as Canada’s employment growth was much higher than expected. US employment was disappointing and that also added to bullish bias of the Canadian currency. The loonie fell versus the euro and the Japanese yen.
Canadian employers added 34,300 jobs in August, following the drop by 30,400 in July. Economists expected an increase by just 9,900. The unemployment rate remained at 7.3 percent. On top of that, the Ivey Purchasing Managers’ Index was little changed at 62.5, while analysts predicted decline to 61.2.
The poor US employment data fueled speculations that the Federal Reserve will start a third round of quantitative easing. Such talks were positive for the riskier currencies, including the loonie.
USD/CAD dropped from 0.9828 to 0.9779 as of 19:00 GMT today and its daily minimum of 0.9764 was the lowest since September 2, 2011. Meanwhile, EUR/CAD rose from 1.2414 to 1.2516 and CAD/JPY fell from 80.24 to 80.00.
If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.
Tags
CAD/JPY, Canada, Dollar, Employment, EUR/CAD, Federal Reserve, PMI, Richard Ivey School of Business, USD/CAD
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Earlier News About the Canadian Dollar:
- Good News Make CAD Stronger, Even More Good News Expected Tomorrow (2012-09-06)
- Bank of Canada Holds Rates, Loonie Slumps (2012-09-05)
- Canadian Dollar Stands Still Ahead of BoC Rate Decision (2012-09-05)
- Canadian Dollar Consolidates Last Week's Gains (2012-09-03)
- Canadian Dollar Falls Back on Economic Uncertainty (2012-08-30)
2 Comments
I like the statement: ”Such talks were positive for the riskier currencies, including the loonie.＂Obviously you are not an economist as nothing is more riskier than the EUR and the USD at this time.
Thank you for your comment! Actually, the CAD is considered high-risk because of its close ties with oil price, which becomes a foreign exchange risk, not a credit default risk.
The government bond yields suggests that keeping assets in the Canadian currency is only little riskier than in USD, while using euro-denominated German bonds would be even less risky.
Of course, since the news article is written from the perspective of currency trading, what is primarily considered are the foreign exchange risks, not credit default risks.