The euro remained range-bound against the loonie on Friday, despite releasing lower-than-anticipated German industrial production data for May. The Canadian employment change data for June also unexpectedly missed estimates. Overall, the EUR/CAD pair traded in a range of 1.4707 to 1.4787 in the final trading session of last week.
According to Destatis, German industrial production fell by 2.50% m-o-m in May following a 0.10% increase in the previous month, missing forecasts of 0.20% growth.
The decline in production was led by the automotive sector, which posted a negative growth of 5.20% m-o-m in May. Likewise, mechanical engineering recorded a 5.90% m-o-m contraction in the same period.
German industrial production fell by 2.90% m-o-m in May, excluding energy and construction. The capital goods production declined by 4% m-o-m in May. Similarly, intermediate goods and consumer goods production dipped 2.70% and 0.20%, respectively. Construction activities declined by 3.30% m-o-m in May. However, energy production grew by 2.60%. Furthermore, in the energy-intensive industries, production inched up 0.20% m-o-m in May.
On a y-o-y basis, German industrial production decreased by 6.70% in May 2024.
The Eurozone retail sales volume inched up 0.10% m-o-m in May following a 0.20% decline in the previous month, missing forecasts of a 0.20% growth.
The increase was led by a 0.70% rise in retail trade volumes of food, drinks, and tobacco. Likewise, automotive fuel (specialized stores) recorded a growth of 0.40%. However, retail trade volumes of non-food products (except automotive fuel) inched down by 0.20% m-o-m in May.
On a y-o-y basis, as per the data published by Eurostat, Eurozone retail sales rose by 0.30% in May 2024.
The increase was led by a 0.30% rise in retail trade volumes of food, drinks, and tobacco. Similarly, non-food products (except automotive fuel) posted a growth of 0.70%. However, automotive fuel (in specialized stores) recorded a decline of 0.60%.
According to Statistics Canada, the country’s economy lost 1,400 jobs in June following an addition of 26,700 jobs in the previous month, missing forecasts of 27,300.
The decline was led by the transportation and warehousing sector, which lost 12,000 jobs. Likewise, public administration lost 8,800 jobs. On the contrary, the accommodation and food services sector recorded an addition of 17,000 jobs. Similarly, the agriculture sector added 12,000 jobs.
On a y-o-y basis, Canada added 343,000 jobs in June. In percentage terms, the country’s employment increased by 1.70% y-o-y in June 2024. The increase was led by the public sector, which posted an addition of 183,000 jobs. The private sector added 106,000 jobs.
The statistical organization also stated that the country’s unemployment rate increased to 6.40% in June from 6.20% in May. Economists had anticipated an unemployment rate of 6.30%. Interestingly, Canada’s unemployment rate has risen by 1.30% since April 2023.
The employment rate inched down 0.20% to 61.10% in June. Also, the total hours worked fell by 0.40% in the same period. On a y-o-y basis, Canada’s total hours worked grew by 1.10%.
Average hourly wages among employees increased by 5.40% y-o-y in June. This follows a 5.10% rise in May.
The weak German industrial production data is expected to keep the EUR/CAD pair slightly bearish in the short term.
The historical price chart indicates that the EUR/CAD pair is ascending after testing the support at 1.4690. The next resistance is anticipated to be only near 1.4860. Additionally, the currency pair is trading above its 50-day moving average, while the stochastic indicator is in the bullish zone. Therefore, we anticipate the EUR/CAD pair to remain in an uptrend for the next few trading sessions.
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.
