Release Explanation: The release measures the number of jobs created, or the percentage of employed/unemployed in the labor market. “A currency will strengthen or weaken in-line with the other releases that the Employment Data influences, rather than just as a one-off knee-jerk reaction to these numbers printing” TheLFB-Forex.com Trade Desk said.
TheLFB-Forex.com Trade Desk Thoughts: Employment grew by 36,000 in April, the result of an increase in self-employment. Despite this increase, overall employment has fallen by 321,000 since the peak in October 2008. The unemployment rate was unchanged at 8.0% in April, remaining at its highest level in seven years, with the growth in employment coinciding with an increase in the labor force.
TheLFB-Forex.com Trade Team notes that the Canadian labor market is following the same route as the U.S. and the European labor markets. Even though employment increased for the first time in the last six months, most of the gains came from the self-employment sector, which does not guarantee that this trend will continue in the coming month. For now, the government hands are tied since there is little the authorities can do to reverse the rising unemployment trend. Additionally, this seems to be a global trend, rather than a local one.
Forex Technical Reaction: The cad traded on low momentum during the overnight session, but ahead of the release, the pair plunged some 90 pips lower making a new low for the last few months of trading.