Canadian dollar drops after jobs shock, US payrolls boost dollar
MacroDigital Finance
The Canadian dollar weakened on Friday after a sharp drop in domestic employment contrasted with a stronger-than-expected U.S. jobs report, pushing the U.S. dollar higher and ending the loonie's recent run of gains. USD/CAD traded around 1.3862, up about 0.5% on the day, after dipping below 1.38 earlier. Canada's economy lost 41,700 jobs in August, versus expectations for a gain of about 15,000, while the unemployment rate held at 6.4% and the employment rate slipped to 60.8%. The U.S. added 162,000 jobs in August, with unemployment at 4.1%, reinforcing expectations that the Federal Reserve may be less urgent to ease policy. Analysts say the weak Canadian data pressures the Bank of Canada to stay accommodative, while strong U.S. payrolls support the Fed's higher-for-longer stance, widening the rate differential in favor of the dollar. The report also flagged risks from new U.S. tariffs on trade-sensitive industries.
