It seems like nothing can stop the Canadian dollar, which is rising again on the back of strong employment numbers and the continual rise in oil prices. Today’s Canadian labor market report reflects the country’s economic strength. The number of jobs added last month was five times more than the market’s expectations driving the unemployment rate down to a 33-year low.
September housing starts were also revised to the highest on record. With a strong labor and housing market, the Canadian economy has become far more immune to US economic strength or weakness. This will keep the Bank of Canada on hold into the first quarter with the growing possibility of an interest rate hike. In the week ahead, we have Canadian housing market data, IVEY PMI and the trade balance. We continue to expect USD/CAD to hit 90 cents before hitting parity. As for the Australian and New Zealand dollars, they too are stronger against the greenback today. There was no data released last night, but these currencies will be in play next week with labor market reports from both countries as well as a Reserve Bank of Australia interest rate decision. A rate hike is expected and if it materializes the Australian dollar could be the next currency to hit parity with the US dollar.