Canadian Unemployment Ticks Higher to 6.9%, USD/CAD Flat Near 1.3920 as Dollar Index Stays Above 100 Canadian Unemployment Ticks Higher to 6.9%, USD/CAD Flat Near 1.3920 as Dollar Index Stays Above 100

Key Moments:

• Canada’s unemployment rate increased to 6.9% in April, exceeding expectations of 6.8%.
• Net job creation totaled 7.4K in April, rebounding from a 32.6K decline in March.
• The USD/CAD pair is trading around the 1.3920 mark on Friday, while the US Dollar Index remains above 100.

Labor Market Overview

According to data published by Statistics Canada, the country’s unemployment rate increased to 6.9% in April. This marks an increase from the 6.7% rate observed in March, and it also surpassed analyst forecasts of 6.8%. Employment did inch higher in April, however, with a net gain of 7,400 jobs, partly reversing March’s 32,600 drop. Meanwhile, the participation rate increased modestly by 0.2% to 65.3%. Another key figure showed that hourly wages maintained last month’s pace by climbing 3.5% on a YoY basis.

At present, market response to the news appears muted when it comes to the USD/CAD pair’s exchange rate as it continues to hover near the 1.3920 value.

The pair did remain supported by the US dollar’s broad strengthening during the European session on Friday. Although momentum has since waned, the US Dollar Index has been successful in staying firmly above the 100 threshold that it managed to reach on May 8th.

Contributing to the Greenback’s strength was the Federal Reserve’s recent guidance indicating that it is not in a hurry to cut interest rates, citing policy uncertainty linked to the trade measures implemented by US President Donald Trump. Additional support came from the announcement of a new trade agreement between the United States and the United Kingdom, as well as hopes regarding an improvement in the trade relations between Washington and Beijing as Saturday’s scheduled meeting approaches.