Canadian Dollar Sees Heavy Volatility after Employment Data Disappoints

The Canadian dollar fell against the US dollar and New Zealand dollar, but gained against the rest of the majors, after Canadian data proved to be very disappointing. Indeed, USD/CAD surged about 75 point in a matter of 2 minutes after data showed that the net employment change fell by 44,500 during July, compared to a drop of 7,400 in June and expectations for a decrease of 17,500. However, with the participation rate slipping to 67.2 percent from 67.5 percent, the unemployment rate actually held steady at 8.6 percent. Later in the morning, the Ivey Purchasing Managers Index (PMI) also fell more than forecasted, to 51.8 in July from 58.2. Since 50 is the point of neutrality, the data indicates an expansion in activity once again, albeit at a slower pace. Meanwhile, the employment component of Ivey PMI fell back below 50 to 48.2, which is in line with the actual net employment change we saw at 7:00 ET.