Select Language

Canadian Dollar steadies after job losses, eyes on US CPI next week

Breaking news

Canadian Dollar steadies after job losses, eyes on US CPI next week

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
update 2025.08.09 04:06
Canadian Dollar steadies after job losses, eyes on US CPI next week

update 2025.08.09 04:06

  • The Canadian Dollar caught an early decline on Friday, but Greenback declines are squaring Loonie positioning.
  • Canada shed jobs in July after the pace of hiring declined faster than expected.
  • Coming up next week: US CPI inflation figures to dominate market sentiment early.

The Canadian Dollar (CAD) stumbled on Friday, falling against the US Dollar (USD) before broad-market Greenback sentiment overtook Loonie positioning to chip away at the USD's late-week strength. Canadian jobs data came in far below expectations, kicking the legs out from beneath Loonie bulls before general market sentiment continued forcing the US Dollar lower and giving the CAD a mulligan on souring jobs data.

Meaningful Canadian economic data is functionally absent from the economic release calendar next week, leaving global Greenback positioning in the driver's seat once again. Another interest rate cut at the Bank of Canada's (BoC) next interest rate decision is now a foregone conclusion as job creation dries up, but Monday's upcoming US Consumer Price Index (CPI) inflation data will be the key datapoint next week and could throw a very large wrench into markets that are hoping for a continued easing in inflation pressures.

Daily digest market movers: Canadian Dollar moves in either direction remain temporary

  • The Canadian Dollar tumbled before recovering ground on Friday, keeping USD/CAD hobbled near 1.3750.
  • Canada lost 40.8K net jobs in July, shattering expectations of a thinner slowdown and taking a large chunk out of the previous month's 83.1K upswing.
  • A sharp contraction in net Canadian jobs has pinned expectations of another rate cut at the BoC's next rate call on September 17.
  • The BoC's upcoming interest rate decision will be entirely eclipsed by the Federal Reserve (Fed), which makes its next interest rate decision on the same day.
  • Key US CPI inflation data is due next week, and will draw plenty of attention as investors hope that inflation progress will slowly grind ahead.

Canadian Dollar price forecast

After some back-and-forth with the US Dollar, the Canadian Dollar is poised to end the week close to where it started. USD/CAD is now hamstrung along the 50-day Exponential Moving Average (EMA) near 1.3745, with further technical support baked in at the 1.3700 handle. CAD gained a scant 0.26% against the US Dollar this week, but meaningful bullish momentum behind the Loonie remains absent.

USD/CAD daily chart


Canadian Dollar FAQs

The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada's largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada's exports versus its imports. Other factors include market sentiment - whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) - with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada's biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada's case is the Canadian Dollar.

Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.


Date

Created

 : 2025.08.09

Update

Last updated

 : 2025.08.09

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

AUD/USD edges into fourth straight winning day

AUD/USD caught a late-week lift on Friday, rising into the 0.6550 region after the latest US inflation data pushed the US Dollar (USD) lower across the board.
New
update2025.08.30 02:44

Silver Price Forecast: XAG/USD rallies to fresh 14-year high, eyes break above $40.00

Silver (XAG/USD) extends its rally for the fourth consecutive day on Friday, with spot prices climbing to fresh 14-year highs.
New
update2025.08.30 02:31

Dow Jones Industrial Average stumbles after PCE inflation rises

The Dow Jones Industrial Average (DJIA) softened on Friday, easing back below 45,500 as stocks retreated due to another uptick in US Personal Consumption Expenditures Price Index (PCE) inflation figures.
New
update2025.08.30 01:51

USD/CHF slides to one-month low as resilient US data fails to lift Greenback

The Swiss Franc (CHF) extends its rally for the fourth consecutive day on Friday, with USD/CHF slipping toward the 0.8000 psychological mark near fresh one-month lows, pressured by a broadly weaker US Dollar (USD) despite resilient US inflation and spending data.
New
update2025.08.30 00:35

GBP/USD consolidates above 1.3450 with muted reaction to US inflation data

The British Pound (GBP) trades under pressure against the US Dollar (USD) on Friday, snapping a three-day winning streak as the Greenback holds firm.
New
update2025.08.29 22:38

Canadian economy contracts by 1.6% in the second quarter

Canada's real Gross Domestic Product (GDP) declined by 0.4% on a quarterly basis in the second quarter, Statistics Canada reported on Friday. This print followed the 0.5% growth recorded in the first quarter.
New
update2025.08.29 22:26

EUR/USD steadies above 1.1660 as US PCE data matches expectations

The Euro (EUR) is trading under pressure against the US Dollar (USD) on Friday, edging lower in early dealings before steadying around 1.1660 after the US July Personal Consumption Expenditures (PCE) inflation report came broadly in line with expectations.
New
update2025.08.29 22:21

EUR/CHF Price Forecast: Euro steadies below 100-day EMA, eyes 0.9400 hurdle

The EUR/CHF attracts buyers on Friday, extending gains for a second straight day after a three-day decline earlier in the week. The cross is trading near 0.9358 at the start of the American session, holding just below the 100-day Exponential Moving Average (EMA).
New
update2025.08.29 21:33

USD/CAD steady near 1.3750 as traders await US PCE inflation and Canada GDP

The USD/CAD is virtually unchanged on Friday, trading flat after pausing a three-day losing streak as traders turn cautious ahead of the US Personal Consumption Expenditures (PCE) inflation report and Canada's Gross Domestic Product (GDP), both scheduled for release at 12:30 GMT.
New
update2025.08.29 20:54

USD/JPY: Markets balance weaker data and supportive spreads - Scotiabank

The Japanese Yen (JPY) is entering Friday's NA session flat from Thursday's close, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.08.29 20:51

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel