Canada’s Dollar Declines after Active Labor Force Numbers Drop

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Canada’s Dollar Declines after Active Labor Force Numbers DropThe Canadian dollar fell versus most of its major counterparts after the employment numbers fell in August, boosting speculation the central bank may raise interest rates soon.

The loonie tumbled 0.1 percent to C$1.0885 per U.S. dollar as of 10:36 am Toronto time. One Canadian dollar is equivalent to 91.87 U.S. cents. The currency dropped after the number of Canadians in active workforce fell 11,000 last month, down from a gain of 41,700 in July. Economists surveyed by Bloomberg News had expected an increase of 10,000.

The Bank of Canada retained its main interest rate earlier this week and remained neutral over its next move, justifying that rising exports need to be boosted further in order to facilitate a broad-based economic growth.

“It probably confirms their neutral bias going forward,” Shaun Osborne, a chief currency strategist at Toronto-Dominion Bank, told Bloomberg News.

The nation’s target 10-year government bond rose, with yields declining 0.03 percentage point, or three basis points, to 2.09 percent. The 2.5 percent note that matures in June 2024 rose 30 cents to C$103.58.

Today’s employment data indicated that Canadian private employers shed 111,800 jobs, the most since April 1982. Statistics Canada reported that the number of workers holding part-time jobs plunged 8,700 in August, while full-time workers fell 2,300. 20,800 workers exited the labor force last month, reducing the labor participation rate to 66 percent, the weakest level since November 2001.

Another report published on Thursday showed that Canada recorded its biggest trade surplus in nearly six years in July, fuelled by surging demand for automobiles.To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com