The Canadian dollar is steady on Friday, after a two-day slid in which the loonie declined by 1%. In the North American session, USD/CAD is trading at 1.3911, down 0.09% on the day. On the data calendar, Canada released the employment report and there are no US economic releases.
The April employment report didn't show much change and the Canadian dollar has shown little reaction. The economy added 7.4 thousand jobs, rebounding from the loss of 32.6 thousand in March and above the market estimate of 2.5 thousand. At the same time, the unemployment rate climbed to 6.9%, higher than the market estimate of 6.8% and above the March reading of 6.7%. This was the highest level since Nov. 2024.
The rise in unemployment is likely a reflection of the US tariffs. Canada's exports to the US were down in March, hurting businesses that export to the US. If the tariffs remain in place, weaker demand from the US could significantly damage Canada's economy.
The Bank of Canada released its Financial Stability Report on Thursday. The BoC said that the financial system was strong but warned that a prolonged trade war between Canada and the US could lead to banks cutting back on lending, which would hurt consumers and businesses and damage the economy. The report said that the unpredictibility of US trade policy could cause further market volatility and was a risk to financial stability.
The Federal Reserve maintained rates earlier this week and Fed Chair Powell said the Fed was in a wait-and-see-stance due to the uncertainty over the US tariffs. We'll hear from seven Fed members on Friday and Saturday, who may provide some insights on where rate policy is headed. The markets have priced in a rate hike in June at only 18%, down sharply from 58% a week ago.
USD/CAD is testing resistance at 1.3928. Above, there is resistance at 1.3935
1.3922 and 1.3915 are the next support levels
The April employment report didn't show much change and the Canadian dollar has shown little reaction. The economy added 7.4 thousand jobs, rebounding from the loss of 32.6 thousand in March and above the market estimate of 2.5 thousand. At the same time, the unemployment rate climbed to 6.9%, higher than the market estimate of 6.8% and above the March reading of 6.7%. This was the highest level since Nov. 2024.
The rise in unemployment is likely a reflection of the US tariffs. Canada's exports to the US were down in March, hurting businesses that export to the US. If the tariffs remain in place, weaker demand from the US could significantly damage Canada's economy.
The Bank of Canada released its Financial Stability Report on Thursday. The BoC said that the financial system was strong but warned that a prolonged trade war between Canada and the US could lead to banks cutting back on lending, which would hurt consumers and businesses and damage the economy. The report said that the unpredictibility of US trade policy could cause further market volatility and was a risk to financial stability.
The Federal Reserve maintained rates earlier this week and Fed Chair Powell said the Fed was in a wait-and-see-stance due to the uncertainty over the US tariffs. We'll hear from seven Fed members on Friday and Saturday, who may provide some insights on where rate policy is headed. The markets have priced in a rate hike in June at only 18%, down sharply from 58% a week ago.
USD/CAD is testing resistance at 1.3928. Above, there is resistance at 1.3935
1.3922 and 1.3915 are the next support levels
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.