FX.co ★ Canadian Dollar Weakens After Weak Labor Data

The Canadian dollar weakened beyond 1.37 per US dollar as a cooling domestic labor market and shifting global monetary policy expectations reshaped the currency’s outlook. The labor market deteriorated in February, with the unemployment rate rising to 6.7% and a loss of 83,900 jobs, signaling a more pronounced slowdown in the domestic economy. Manufacturing sales fell 3% in January, as industrial activity faced headwinds from softer demand. Geopolitical uncertainty in the Middle East and the strength of the US dollar continue to weigh on the loonie. Markets are now pricing in a delayed Federal Reserve easing cycle, with rate cuts pushed back toward September. This shift reinforces the US dollar’s yield advantage and leaves the loonie vulnerable to further volatility as investors gravitate toward the relative stability of the United States.