Currency Market Analysis
May 07, 2021 | Currency Market Analysis
Canadian dollar surged yesterday to its highest level since September 2017 aided by strength in commodities prices and a lower US dollar overall. The Canadian Jobs Report for April was also weaker than expected as 207,000 jobs were lost, versus expectations of 175,000, as the 3rd Covid wave forced restrictions across the country in April. The unemployment rate rose to 8.1%, also topping expectations.
The British Pound is higher by half-a-cent vs the US dollar after US Non-Farms and is nearing a series of recent highs at 1.3975 and 1.4010. British economic data, particularly Service Sector and Composite data for April indicate a strongly growing British economy.
Given the US labor market created 916,000 jobs in March it made sense for the market to expect an even higher number in April with strong economic data and the opening of the US economy. As if we needed reminding that nothing is the same in this post-Covid world, April Non-Farm Payrolls expanded by just 266,000 jobs with the previous two months revised lower by 78,000 jobs. The unemployment rate actually rose to 6.1% vs 6.0% in March and the expectation of a drop to 5.8%. The labour market is short about 8 Million jobs post-Covid.
The Euro powers ahead after the disappointing US Non-Farm Payrolls Report this morning having traded very close to the April 29th 1.2150 high. The Euro has been helped this week by stronger domestic economic data and progress on the vaccination front. The EU is expected to soon announce the purchase of 1.8 Billion doses from Pfizer.
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