The Canadian economy surprised markets, by creating 61K jobs in September, a figure that was more than triple expectations. The data has been mixed of late in Canada, and this is a very positive report, which sent the CAD higher against its major rivals.

From the Release: Following two months of little change, employment rose by 61,000 in September, all in full time. This increase pushed the unemployment rate down 0.2 percentage points to 7.1%, the lowest rate since December 2008.

September's employment increase was spread across a number of industries, with gains in educational services; professional, scientific and technical services; accommodation and food services; natural resources; and public administration. These gains were partially offset by declines in finance, insurance, real estate and leasing; manufacturing; and information, culture and recreation.

From Bloomberg: Canada's economy added the most jobs in eight months in September, led by hiring at schools, bringing the country's jobless rate to its lowest since 2008.

The rise marks a recovery for the country's labor market after the economy added a net 1,600 workers in the previous two months, bringing the average monthly gain in the third quarter to 20,833. That's the smallest quarterly increase since the last three months of 2010.

The monthly gain was led by 38,400 new jobs in education services, and a 35,600 increase for professional and scientific services.The finance, insurance, real estate and leasing industries saw 35,300 jobs lost in the month, and trade, transportation and manufacturing also recorded declines. Construction companies added 11,600 new jobs during the month, while natural resources firms hired 17,100 workers.

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The USD/CAD sliced through the 200-ema, an important development that continues to give us a bearish leaning in the pair as it further pulls back from its upward really from between Sept. 28th-Oct. 4th. We are now at a 61.8% retracement of that upswing, which also runs into some important pivots from early last week. We want to see if the pair can sustain this move below 1.0365. If the NFP report obliges risk appetite, the USD/CAD can extend its move towards the 1.0260 area.

Nick Nasad
Chief Market Analyst
FXTimes