A loss of 54,000 jobs in October drove the Canadian unemployment rate to 7.3 percent and has resulted in a loss of more than a cent to the U.S. dollar on early morning trading in Toronto. The loonie tumbled 1.15 cents to 98.05 cents US as traders also took in weak U.S. employment data for October.
“It is too early to draw a direct link to the volatility in global financial markets as the European sovereign debt crisis rages on,” said RBC assistant chief economist Dawn Desjardins. “To be sure, additional declines in November and December would suggest that Canadian companies are feeling the pinch from falling export demand and are reacting to the uncertainty generated from outside Canada’s borders.”
Source: The Canadian Press
Friday’s Non-Farm Payroll report rose by 80,000 in October but missed expectations for a gain of 95,000. August and September figures were revised upwards by 102,000 more jobs resulting in lowering the official unemployment rate from 9.1 percent to 9.0 percent.
The labor market remains a top concern as without significant improvement, overall economic recovery is impossible. 13.9 million workers remain unemployed but recent gains provide some hope that the jobs market is growing stronger.
The number of new claims for unemployment benefits last week caught market watchers by surprise. Instead of dropping to 404,000 new claimants, the number increased by 10,000 t0 424,000 new claims.
The result show the volatility in the employment market clearly confirming that the US employment outlook remains weak. Total unemployment is still at nine percent and little headway has been made in reducing this number in the past six months.
“Claims are still unfortunately seeing some upward pressure from state and local government job cuts,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. The first-quarter growth figures show “a modest soft patch to the recovery,” he said.
Source: Bloomberg
It looks like the FED did as was expected and the market was kind enough to follow suit, by selling the dollar and buying up other currencies. But see what I mean about the volatility! Take a look at this 5-minute chart of EUR/USD. (click chart to enlarge) Over 60 pips in less than a few minutes!
Hopefully readers you took my advice and sold USD bought other currencies, or steered clear of the mayhem all together!
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