Canadian Dollar Declines after Unemployment Rate Unexpectedly Increases

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Canadian Dollar Declines after Unemployment Rate Unexpectedly IncreasesThe Canadian dollar fell on news that the country’s unemployment rate surprisingly surged, lending credence to the Bank of Canada’s cautious view of the economy.

The Canadian dollar fell 0.1 percent to C$1.0936 per US dollar close to 11:00 a.m. in Toronto. Normally, one loonie can buy 91.44 U.S. cents.

Statistics Canada reported on Friday that unemployment rate rose to 7 percent from 6.9 percent. The number of fulltime jobs declined, with part-time workers increasing. The Canadian dollar posted losses early this week after the central bank signaled that the slow growth indicated that the risks associated with low inflation will persists despite the increasing consumer prices.

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Canada absorbed 25,800 workers in April, exceeding the 25,000 new jobs expected by economists in a Bloomberg News survey. The number of full-time jobs fell by 29,100 in May as the number of part-time employees grew by 54,900 as is the trend in the past one year when most new jobs have been part-time.

“They probably won’t be too happy that the full time jobs numbers are relatively negative,” Bipan Rai, a Toronto-based director of foreign exchange strategy at CIBC World Markets, told Bloomberg. “One month is a bit of a concern but two months might start weighing on the Bank of Canada.”

Jobs in the service industry grew by 35,100 last month, while those in goods production declined by 9,500, reported the statistics office. Jobs in education sector grew by 21,500, while food service and hospitality sector saw jobs increase by 19,500. Manufacturers shed 12,200 jobs while natural resources firms dismissed 23,200 workers. 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