Canadian Economy Shows Signs of Weakness, CAD Suffers

The Canadian dollar fell against the US dollar and the euro yesterday and remained soft today as traders were concerned that the Canadian economy is not in a very good shape. The currency was little-changed against the Japanese yen after rallying on the previous trading session.

Last week’s macroeconomic reports were surprisingly poor. The employment report was especially bad, showing a drop by 39,400 and the increase of the unemployment rate to 7.2 percent. Analysts have hoped that employment would increase by 6,200 and the unemployment gauge would stay at 7.1 percent.

The Canadian currency has started this week without clear trend as market participants were trying to assess the trading environment and choose a direction for the currency. It looks like they have chosen to be bearish, driving the currency down.

USD/CAD rose from 1.0341 to 1.0358 and EUR/CAD advanced from 1.3715 to 1.3745 as of 6:14 GMT today. CAD/JPY was flat at 94.90.

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