CAD: Glimmer of hope on the labour market – Commerzbank

The Canadian labour market figures for September, published on Friday, came as a pleasant surprise. Instead of the expected 5,000 jobs, the Canadian economy created more than 60,000 jobs, led by full-time positions. At the same time, the unemployment rate fell despite a higher participation rate. Overall, therefore, this was a very positive labour market report, Commerzbank's FX analyst Michael Pfister notes.

Labour market figures are likely to remain volatile

"This was good news for the CAD, which was able to recoup some of the losses it had incurred against the US dollar on Thursday. This makes another interest rate cut by the Bank of Canada at the end of the month somewhat less likely. However, it should be noted that Canadian labour market figures have been exceptionally volatile over the last four months."

"June saw significant job growth, followed by two weak months, and now another strong month. I would therefore be cautious talking about a trend reversal at this stage."

"As long as relations with Canada's southern neighbour remain tense and sentiment indicators do not improve significantly as a result, labour market figures are likely to remain volatile and show no fundamental improvement. This is likely to make things difficult for the CAD in the coming months."