Loonie Loses Ground Despite Robust Canadian Jobs Growth

The Canadian dollar was also a casualty of the stronger than expected U.S. jobs report despite releasing its own payroll report that showed substantial growth. The currency pair pushed above the October highs and is poised to test resistance near 1.3456. Momentum is positive with the MACD printing in the black with an upward sloping trajectory.

Canada’s sizable 44.4k jobs surge in October crushed expectations which was for a 10K increase. A look under the hood reveals a jobs report consistent with an ongoing, gradual economic recovery that is in-line with the BoC’s outlook. Temporary hiring related to the federal election accounted for the overshoot relative to expectations. There was a 32.0k surge in public administration payrolls that Statistics Canada attributed to temporary work associated with the federal election.

Statistics Canada has acknowledged the difficulty in seasonally adjusting this sector. Resource sector jobs fell 8.0k, leaving 29.5k jobs lost year to date as the sector continues to adjust to an environment of lower prices. But manufacturing grew 6.5k. The unemployment rate slipped to 7.0% from 7.1%, hours worked grew 0.3% m/m after the 0.8% plunge in September and average hourly wages grew 3.1%.

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