Last week, U.S. and Canada released their latest employment reports. So which of them caused cheers and which caused concerns among forex traders?
U.S. Non-Farm Employment
The figures released in January caused concerns among forex traders as it reflected only 151,000 workers found jobs. Aside from being below the expected 189,000 growth, it also marked the weakest gain since September; which is just below the average of 2015 (228,000).
What caused concerns among investors is the wages. Average hourly earnings have increased by 0.5% after adding the 2.7% increase in December, which is the largest increase since 2009. In addition, the average work week has also extended by 6 minutes to 34.6 hours, which is the longest since August. These improvements lead to taking more money home for an average Joe.
About 5,700 workers lost their jobs in January as the 5,600 workers that had full-time jobs were offset because of the 11,300 layoffs in part-time positions. Players in the market had been predicting an average increase of 5,500 to 6,000 jobs. Labor participation rate is still and unchanged, pushing the country’s unemployment rate to a 2-year high of 7.2%.
While Canada’s employment woes have affected many, not all hope is lost as IVEY PMI and trade data still shows bright spots in the economy. The spotlight is on the BOC as to whether they’d stimulate spending by decreasing interest rates.
Reaction of the Market
Initially, the dollar was sold across the board at the release of employment report; however, it was soon caught up in a rally after taking a second look at the data. It’s difficult to predict whether last Friday’s session will stick with many major markets on the holidays. It may be a good idea to pay particular attention to the risks and oil price movements if you want to trade on the dollar and the Loonie this week.