Canada’s unemployment rate dipped to 6.9% in October from 7.1% the previous month, beating economists’ forecasts, Statistics Canada reported. Employment rose by 66,600 jobs—far above the 2,500-job decline analysts had expected and up on September’s 60,400 gain. The participation rate climbed to 65.3% from 65.2%, and average hourly wages jumped 4.0% year-on-year, pointing to still-robust wage growth even as total hours worked were slightly trimmed by strike activity.
Market reaction
- The Canadian dollar snapped a six-day slide, driving USD/CAD back below the 1.4100 level after the data release.
- Among the major currencies today, the loonie’s biggest gains were versus the New Zealand dollar, followed by modest improvements against the euro, pound and yen.
Heat-map overview
A currency heat-map of today’s moves shows each row as the base currency and each column as the quote currency. For example, the cell at the intersection of CAD (row) and USD (column) shows today’s percentage change in USD/CAD.
Preview of the October labour report
Before the data hit at 13:30 GMT, most economists had expected Canada to lose 2,500 jobs in October (after adding 60,400 in September) and for the unemployment rate to hold at 7.1%—its highest level since July 2021. They also forecast average hourly wages to rise by 3.6% year-on-year. Signs of a cooling labour market had been seen as a potential drag on the Bank of Canada’s rate outlook.
How the data could affect USD/CAD
- Technical setup: USD/CAD had been trading in a tight range around 1.4100, having broken out of the previous resistance zone between 1.4016 and 1.4080.
- Trend signals: The 20-day exponential moving average near 1.4027 pointed to a bullish near-term trend, and the 14-day RSI sat close to 70, indicating strong upside momentum.
- Upside targets: A clear move above November 6’s high of 1.4140 could open the door to 1.4200 and then the April 9 top at 1.4274.
- Downside risks: A break below the August 7 low of 1.3722 might send USD/CAD down toward the 1.3600 round number and June 16’s low of 1.3540.
