Canadian Dollar gives back gains despite upbeat jobs data

• The Canadian Dollar firmed up on Friday, but Greenback flows rallied harder, driving a rebound in USD/CAD.
• US NFP net job gains came in stronger than expected, overshadowing Canadian job numbers.
• Key post-tariff US CPI inflation figures loom large next week; Canadian data docket runs out of gas.

The Canadian Dollar (CAD) saw firm gains in employment figures on Friday, with an overall net increase in Canadian employment thumping median market forecasts for a contraction. However, a stronger-than-expected US Nonfarm Payrolls (NFP) print eclipsed Canadian economic data, giving the US Dollar (USD) a much-needed rebound.

The Canadian economic data docket is slim next week, leaving Loonie markets exposed to Greenback flows. The US's first inflation print that will include preliminary price volatility impacts from the Trump administration's whipsaw "reciprocal" tariff package announced in early April is slated to be released next Wednesday. Investors will likely grow apprehensive ahead of the data print, which is expected to show an overall increase in price pressures.

Daily digest market movers: Canadian Dollar gains overshadowed by post-NFP market reaction

• The Canadian Dollar pared recent gains against the US Dollar, falling around one-sixth of one percent and pushing USD/CAD back up to the 1.3700 region.
• Canada added 8.8K net new jobs in May, well above the expected 15K contraction.
• The US also added 139K new payroll positions over the same period, falling slightly from April's revised 147K but holding well above the expected 130K.
• A broad miss by investors to forecast this Friday's labor prints on both sides of the US-Canada border reveals the struggle of analysts to accurately calculate the economic impacts of the US's whiplash trade policies.
• Canada remains largely absent from next week's economic data docket. However, key US CPI inflation data is due next Wednesday. US CPI is expected to tick up across the board as April's opening trade tariff volley by the Trump administration is expected to start appearing in broad economic datasets.

Canadian Dollar price forecast

The Canadian Dollar remains in a firmly bullish stance against the US Dollar, but Loonie bidders are having an increasingly difficult time muscling USD/CAD underneath the 1.3700 handle in the near term. Momentum still holds in favor of the Loonie, with the pair trapped in a rough downtrend from the year's early multi-year peaks near 1.4800.

USD/CAD daily chart