The euro remained range-bound against the loonie last Friday after the release of weak economic data from both Europe and Canada. Both the European and Canadian unemployment rates were higher than anticipated. This ensured that the EUR/CAD pair traded in a narrow range of between 1.4586 and 1.4750 on the final trading day of last week.
According to Destatis, the German trade surplus declined to €16.50 billion in September from €17.70 billion in August and surpassed forecasts of €16.30 billion.
Germany exported goods worth €126.50 billion in September, down 2.40% from August. The reported figure reflects the lowest surplus since March 2022. Likewise, the country imported goods worth €110 billion in September, a decline of 1.70% on an m-o-m basis. The reported figure reflects the lowest value since January 2022.
Exports to EU countries fell by 2.10% in September. Likewise, exports to countries outside the EU declined by 2.80%. Nevertheless, exports to the UK rose by 2.30%.
The Eurozone unemployment rate inched up to 6.50% in September from 6.40% in August. Economists did not anticipate any change in the unemployment rate. Notably, as per Eurostat, the Eurozone unemployment rate was 6.70% in September 2022.
In the Eurozone, the number of unemployed people was 11.017 million in September, an increase of 69,000 from August. Interestingly, compared with September 2022, the number of unemployed individuals fell by 212,000 in the Eurozone.
According to Statistics Canada, the country’s economy added 17,500 jobs in October, following an addition of 63,800 jobs in the previous month, but missed forecasts of 25,700 job additions.
Correspondingly, the unemployment rate inched up to 5.70% in October from 5.50% in September. Economists anticipated Canada’s unemployment to be 5.60%. The reported unemployment rate reflected the fourth monthly rise in the last six months.
The employment rate fell to 61.90% in October 2023 from 62.50% in January. Notably, in October 2022, the unemployment rate was 62%.
The increase in employment was mainly led by the construction sector, which added 23,000 jobs in October. The information, culture, and recreation sectors added 21,000 jobs in the same period. This was partly negated by 22,000 job losses in wholesale and retail trade. The manufacturing sector lost 19,000 jobs.
On a y-o-y basis, average hourly wages grew by 4.80% (or $1.56) to $34.08 in October.
Compared with September, the total hours worked were almost unchanged in October. However, on a y-o-y basis, the total hours worked rose by 2.1% in October 2023.
The weak economic data from both countries is expected to keep the EUR/CAD pair range-bound in the short term.
The historical price chart indicates that the EUR/CAD pair is descending after facing resistance at 1.4750. The next support is anticipated to be only near 1.4475. Additionally, the stochastic indicator is descending towards the bearish zone. Therefore, we anticipate the currency pair to remain in a downtrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
