Canada added an unexpectedly large number of jobs in September. While monthly jobs numbers in Canada are historically volatile, the headline number of 378,200 new jobs was twice the median forecast of 150,000 and hard to ignore as a sign of a strong recovery to date. It is unclear how long the improvement will last given the second wave of Covid-19 cases gripping much of the country. The Canadian dollar immediately gained 0.3% and is currently trading at the highest level in about a month. Even before the jobs numbers, the Canadian dollar was up against its US counterpart as the improved global sentiment continues for a third day in a row. That improved sentiment generally manifest itself in a move away from USD (and a stronger CAD) and that is exactly what has happened in the last three days. Much of the optimism seems to be related to renewed hopes for a stimulus bill. If those hopes fade today, expect the Canadian dollar to give up some of its gains.
