The CAD is up against the US dollar again today, but only marginally. There were no major economic reports out of Canada this morning so investors were focused on the major US employment data.
The total for this week’s Initial Unemployment Claims beat the average of economist’s expectations by 17K with a reading of 473K. While being better than expected was somewhat positive, let’s face it, this is still a ridiculously hideous numbers. Additionally, after being so far off over the last few weeks, the economists polled for this report probably felt a bit of a need up their estimates a bit more than what they had in the past. This report though, had negative connotations for both economies and has virtually led to a draw in the battle of these two currencies today. Yes it is still a bad sign for the US economy, but also as Canada’s largest trading partner by an overwhelming margin, what’s negative for the US tends to be negative for Canada as well. Tomorrow, traders of all currency pairs will, or at least should be focused squarely on the Preliminary quarter-over-quarter US GDP data which is expected to show a large decline from the advanced data posted previously. The big question though is, are the economists still too optimistic, or have they called this one about right. Either way, large moves across the board could be in the works.
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