The Canadian economy demonstrated impressive growth as the unemployment rate fell to 6.6% in January, surpassing market expectations of 6.7%. This decline from December's 6.8% aligns with a surge in job creation, with 76,000 new jobs added, significantly exceeding the anticipated 25,000. Meanwhile, the U.S. economy saw its unemployment rate dip to 4% from 4.1%, outperforming market predictions, and nonfarm payrolls were revised upward by 100,000 in the previous two months.
Economic indicators also highlighted a rise in average hourly earnings. In January, earnings increased by 0.5%, up from December's 0.3%, meeting market estimates. Annually, average hourly earnings remained steady at 4.1%, above the projected 3.8%. However, U.S. nonfarm payrolls fell short of expectations, easing to 143,000 compared to the predicted 175,000.
The Canadian dollar remained steady on Monday despite these economic changes. In contrast, the GBP/USD pair held near 1.2400 during the early European session, reflecting mixed sentiments in the currency markets.
Adding to the economic landscape, European Central Bank President Christine Lagarde is scheduled to address the European Parliament later today regarding the policy outlook, which could further influence market dynamics.
In the realm of trade policy, President Trump has temporarily suspended tariffs for a 30-day period. The Bank of Canada’s upcoming rate decision on March 12 will hinge on economic data and whether these tariffs are reintroduced.
On a broader scale, Canada reported stronger-than-expected economic growth last Friday, adding to the positive outlook. Concurrently, gold prices continue to attract safe-haven flows amid ongoing concerns over trade tariffs. Gold recently achieved record highs just above $2,900, reflecting investor caution.