While all eyes this morning are on the US Non-Farm Payrolls report, quietly north of the border Canada issued a dismal report earlier this morning. The Canadian economy was expected to have added 15K jobs and it lost 54K, pushing the unemployment rate higher to 7.3% from an expected 7.1%.

This caused immediate Loonie weakness as there are now going to be rumblings that that the Bank of Canada’s next move may be to lower interest rates, though they have been experiencing some higher than expected inflation. My friends in Canada tell me that they are experiencing a bit of a housing bubble so they may be in for a hard landing if things both there and in teh US don’t improve greatly.

As you can see form the chart below, the Loonie fell vs. USD by 100 pips (1 cent) in a matter of minutes. This also ties into the global recession story as well though oil prices have been gaining which has been supportive of the Loonie.

1.02 vs. USD may prove to be temporary resistance, with a move higher to 1.0275 more likely.