By: Rolf Li
Mediocre news spread across the desks of currency traders today as Statistics Canada released the change in employment numbers in Canada. The unemployment rate remained at 6.8% while adding approximately 6,600 new jobs in the month of July. The big release was the glimmer of light in dark economic times, but the result was a big blast of cold air.
Although this release has contradicted the call for a Canadian recession, these numbers are more than just a relief. These numbers that were released showed that although jobs were added into our economy, the small margin meant slow growth or no growth as 6,600 jobs show really nothing has changed. Compare that to the previous 50,000 job creation months a few years ago. The disappointment in these numbers was shown once again on the trading floor at the largest stock exchanges in the world. At 3 pm EST, the Canadian Dollar was trading downwards at about 0.15% coming off the day’s trading highs. So with all this news, the real question sparks: when, if true, will the Canadian Dollar rebound to within the parallel trading patterns we have seen in the past?
If you were expecting some massive comeback of the Canadian Dollar, I suggest you should wake up to the smell of slow-brewed coffee. The value isn’t going up anytime soon. This country is separated too much for our economy to handle, and that is one of the big reasons that we have seen such an economic disaster. A government cannot put “all the eggs in one basket (in this case, energy and resource development)”. We cannot have one side of the country that is sluggish when the price of oil has fallen, and one side of the country that is struggling in efficiency when the price is too high. This separation has never worked, and will never work. To be honest, even though I am a Conservative supporter, and will always be, I have truly disliked the way that our manufacturing sector has been handled. What is our government doing by ignoring such a vital part of economy? With all this damage done in the past, the government needs to work twice as hard to fix our economy. We need to get our industries moving–and fast. Without this patch to our economy, we are riding on oil and resources to pull us back in the black. So here is the judgement. Unless we see some massive gains in un-resource related sectors, we are most likely not going to see a strong Canadian Dollar until late-early 2016-17. Of course things can change between that time to boost our money, but as it looks right now, that is the date you are looking for.
So before you go and panic about our currency and declare emergencies, you now know when our money will rebound, so plan ahead, and you could make big on this.