Loonie Gains on Employment, Will Crude Oil Stop Rally?

Canada’s dollar gained today as the unexpected drop of the unemployment rate last week improved outlook for the nation’s economy and attractiveness of its assets. The currency weakened versus the euro.

Canadian employers added 22,000 jobs in May, following the increase by 58,300 jobs in April. The unemployment rate went down to 7.4 percent from 7.6 percent, even as analysts forecast no change.

Dean Popplewell, the head analyst at the online currency-trading firm Oanda Corporation, commented on the influence of the employment report on the Canadian currency:

Fundamentally Canada has done extremely well, and after the jobs report the Canadian dollar has strengthened especially on the crosses. To pick up any momentum against the dollar, Canada would have to break through the 97 cent level, and on the topside all we’re seeing is orders to buy Canada around 98 cents.

The decline of crude oil, the main Canada’s export, may still push the loonie, as the currency is nicknamed, to the downside.

USD/CAD dropped to 0.9757 from 0.9790 today as of 22:47 GMT. CAD/JPY went up from 81.89 to the intraday high of 82.49 before trading at 82.12. EUR/CAD climbed to 1.4067 from 1.4024.

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