The Canadian dollar has ticked higher in the Monday session. Early in North American trade, USD/CAD is trading at 1.3335, up 0.10% on the day. On the release front, Canadian construction numbers were mixed. Housing starts climbed to 216 thousand, marking a 5-month high. Building permits declined 0.2%, its weakest reading since June. In the U.S., the sole event is JOLTS Job Openings. The indicator is expected to improve to 7.22 million, after the previous release of 7.01 million. The U.S will release a host of inflation indicators this week, starting with the Producer Prices Index on Tuesday.
The spotlight was on job numbers on Friday, with key indicators on both sides of the border. Canada’s economy added a stunning 94.1 thousand jobs, crushing the estimate of 10.5 thousand. The unemployment rate dropped from 5.8% to 5.6%. The strong performance boosted the Canadian dollar on Friday, after losing ground for three straight days.
It was a completely different story in the United States. Nonfarm employment change was weaker than expected, plunging from 250 thousand to 155 thousand. This was well off the forecast of 198 thousand. Wage growth remained stuck at 0.2%, missing the estimate of 0.3%. There was better news from the unemployment rate, which remained at a sizzling 3.7%. The data points to slowing growth in the U.S, which could lead to a change in monetary policy. The Federal Reserve minutes from the November meeting indicated that policymakers discussed changing their stance of gradual increases rate increases. The markets are currently looking at one rate hike next year – just a few months ago, analysts were predicting up to rate hikes in 2019.
