- USD/CAD rises to near 1.3920 after the release of the Canadian labor market data.
- The Canadian jobless rate accelerated at a faster-than-expected pace to 6.9%.
- Investors await US-China trade talks scheduled over the weekend.
The USD/CAD pair moves higher to near 1.3920 in Friday’s North American session after the release of the Canadian labor market data for April. The data showed that the Unemployment Rate accelerated at a faster pace to 6.9% from estimates of 6.8% and the March reading of 6.7%, the highest level seen since October 2021.
Higher jobless rate has led the Loonie pair higher despite correction in the US Dollar (USD), suggesting significant weakness in the Canadian Dollar (CAD).
The Canadian economy added 7.4K fresh workers, higher than estimates of 2.5K. In March, the laborforce was reduced by 32.6K workers. Meanwhile, Average Hourly Wage, a key measure of wage growth, rose steadily by 3.5% year-on-year.
Rising jobless rate is expected to boost market expectations that the Bank of Canada (BoC) needs to resume its monetary-expansion cycle, which it paused in the policy meeting last month.
Meanwhile, the US Dollar corrects sharply as investors turn cautious ahead of the United States (US)-China trade talks. US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer have confirmed that they will meet their Chinese counterparts in Switzerland on Saturday, aiming to de-escalate the trade war.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, retreats from almost a month high of 100.85 posted earlier in the day to near 100.30, at the press time.
Ahead of the US-China meeting, President Donald Trump has signaled that tariffs on Beijing could be reduced to 80% through a post on Truth.Social. “80% Tariff on China seems right! It’s up to Scott Bessent,” Trump said.
