The Canadian dollar is up slightly (0.2%) after giving up significant ground yesterday against the US dollar. The Canadian economy lost a larger number of jobs than expected in May as a result of the pandemic closures in several provinces. But the losses were sufficiently close to expectations that they did not change the view that May be the last month of job losses for a while. The impact of the modestly disappointing jobs numbers on USD to CAD were also buffeted by firm oil and rising equity prices which are positively correlated with the Canadian dollar. In the US, today’s official jobs numbers combined with yesterday’s private payroll numbers present a somewhat mixed picture of US jobs creation for May but the markets generally shrugged off the numbers as consistent with the strong recovery that has been priced into prices. In general, the jobs numbers were strong enough to fit with the market’s view that the economies in both countries are recovering quickly but not sufficiently strong to disturb the prevailing market view that interest rate hikes and tapering of pandemic-related monetary stimulus are still not on the horizon.
