Yesterday we saw weakness in CAD to USD rate, after a strong US NFP employment report and weak Canadian jobs figures, which sent USD/CAD 50 pips higher. The USD couldn’t hold the gaind against most other major currencies after the initial 70 pip jump, but it held half of the gains against the CAD, which comes as a result of disappointing employment numbers from Canada.

USD/CAD Chart Daily – The Trend Remains Bullish Even With the USD Retrat

USD/CAD was trading around 1.3550 before the data release, but it jumped to 1.3647 following the release. This represents a significant change in the exchange rate, indicating a weakening of the Canadian dollar relative to the US dollar and the market reaction suggests that there is now increased speculation about the Bank of Canada potentially lowering interest rates before the US Federal Reserve.

Prior to the data release, the odds of a rate cut by the Bank of Canada on June 5 were at 68%. However, following the data release, these odds have increased to 75%, indicating that the Bank of Canada will likely take action to lower rates in order to stimulate the economy in the June meeting.

Canadian March 2024 Employment Report

• March employment decreased by 2.2 thousand jobs, compared to an expected increase of 25 thousand jobs.
• In February, employment had increased by 40.7 thousand jobs.
• The unemployment rate rose to 6.1%, higher than the estimated 5.9% and up from the prior rate of 5.8%.
• Full-time employment saw a small decrease of 0.7 thousand jobs, compared to a significant increase of 70.6 thousand jobs in the previous month.
• Part-time employment also declined, with a decrease of 1.6 thousand jobs, following a decrease of 29.9 thousand jobs in February.
• Average hourly wages for permanent employees increased by 5.1%, up from 4.9% in the previous month (the prior figure was revised to 5.0%).
• The participation rate remained unchanged at 65.3%.

Overall, the March employment data for Canada fell short of expectations, with a decline in employment and an increase in the unemployment rate.

USD/CAD Live Chart