The Canadian dollar is up 0.6% this morning and trading at its highest level in two and a half months. USD to CAD is currently down to 1.250 (CAD to USD is at 0.800). The Canadian dollar is benefitting from a number of tailwinds today. First, and most importantly, the number of jobs has now returned to pre-pandemic levels. Canadian employment increased by 157,000 from August, crushing expectations of 65,000 new jobs. Second, and interestingly, the U.S. jobs number in September badly missed expectations (194k versus 500k expected), though that number was held back substantially by a sharp drop in government employment. The market reaction to the big US miss was subdued by the fact that growth in private employment remained robust. Finally, oil is up again after taking a breather for the last couple of days, providing further support to the Canadian currency. Yesterday, Bank of Canada Governor Tiff Macklem used an appearance to restate his view that, while inflation is proving more persistent than expected, the Bank believes that the factors causing inflation are temporary and therefore will not impact the path of monetary policy.
