GBP/CAD is extending the bullish trend after gaining 0.60% on Wednesday. Currently, the pair is trading at 1.7669 up 0.60% as of 12:40 PM UTC.
Loonie Reacts to Record Jobless Claims in the US
The pound has managed to dominate the pair even though oil prices have rebounded today. Meanwhile, Canada has just recently reported decent trade data. The Loonie is likely bearish on recent news that the jobless claims in the US had surged to a new record at 6.65 million last week. The US is by far Canada’s largest trading partner. Thus, surging unemployment in the US will have repercussions on the Canadian trade and the economy as a whole.
On Friday, the US will report the much waited Nonfarm Payrolls report for March, which might shake both the US dollar and the Loonie. David Kelly, chief strategist at JPMorgan Funds in New York, commented:
“A rough look at the most affected industries suggests a potential payroll job loss of over 16 million jobs. The loss would be enough to boost the unemployment rate from roughly 3.5% to 12.5%, which would be its highest rate since the Great Depression.”
Canada’s February Exports Up 0.5%, Imports Down 0.8%
Earlier today, Statistics Canada said that exports rose 0.5% in February, to $48.3 billion, mainly driven by exports of aircraft. The export of 8 out of 11 product sections increased over the month. Non-energy exports rose 2.3%. In real terms, total exports expanded by 2.7%.
The agency said that exports of aircraft and other transportation equipment and parts increased 18.5%, while aircraft exports alone surged 46.8%, to the highest level in five years.
Canadian imports fell 0.8% to $49.3 billion in February, which is the lowest level in about two years. However, it’s still better than analysts’ expectations of a decline to $49.0 billion. Imports were dragged down by a decline in oil imports. The import of 7 out of 11 sections showed negative results. In real terms, imports declined by 1.2%.
Thus, Canada’s trade deficit narrowed to $983 billion, from $1.7% in January.
The UK’s economy will likely to be heavily affected by the COVID pandemic as well, as the number of new cases and deaths continues to show an exponential growth. However, the Loonie is also under pressure amid the oil price war between Saudi Arabia and Russia.
