USDCAD sold off for the second day in a row following much better than expected Canadian employment data.
If you read yesterday’s Daily Fundamentals, the upside surprise should not much of a surprise because we said that the employment component of the IVEY PMI already forecasted stronger employment growth. The market was looking for only a 15k rise, but instead employment grew by 42k. Although the unemployment rate edged higher from 5.8 to 5.9 percent, the participation rate hit a record high of 63.8 percent which means that more people are encouraged to join the workforce. The Australian and New Zealand dollars did not fare as well however following the drop in Australian construction PMI. Although there isn’t a lot of data from the commodity producing countries next week, the data that we do have can be very market moving. This includes the Canadian trade balance, Australian employment and New Zealand retail sales.