Ouch! The unemployment rate in Canada rose 0.6% to 9.4%, the highest rate since August 2020. The country lost 213 thousand jobs in January, well above the expected 47 thousand job losses. Canada’s jobs numbers are usually quite volatile and the losses this time were concentrated in part time jobs in Quebec and Ontario where the Covid shutdowns have been especially severe. As a such, the read-through for the economy is not entirely clear. Nonetheless, the size of the losses is startling even in pandemic conditions. Canada’s jobs picture looked even worse in comparison to the US numbers also released this morning where jobs creation remained soft but within the expected ranges. Also, on the economic front, Canada’s trade deficit narrowed substantially in December, which probably marginally addresses some of the concern about a strong Canadian dollar that the Bank of Canada has outlined. The net result of all of that, as well as stocks and oil continuing to trade up steadily is that the USD is down 0.3% against the Canadian dollar. The anchor for USD for the last week or so has been 1.280 and it seems like we will stay at those levels for the rest of the day today.
