Story
Canadian Dollar Strengthens to 10-Day High on Weaker US Jobs Data
Summary
The Canadian dollar climbed to its highest level in 10 days against the U.S. dollar, supported by a weaker-than-expected U.S. employment report and positive domestic manufacturing data. The U.S. data has led to reduced expectations for a near-term interest rate hike from the Federal Reserve.
The Canadian dollar rose to its strongest level in 10 days against its U.S. counterpart on Thursday, bolstered by economic data from both countries. The "loonie" was trading 0.3% higher at 1.4175 per U.S. dollar, or 70.55 U.S. cents. It reached an intraday peak of 1.4147, a level not seen since June 22.
The primary driver for the currency's strength was a U.S. jobs report indicating a cooling labor market. According to the data, U.S. job growth slowed in June, and payroll figures for the previous two months were revised lower. This development has led financial markets to scale back expectations of an imminent interest rate increase by the U.S. Federal Reserve, putting downward pressure on the U.S. dollar.
Supporting the loonie's rise was positive domestic news and a slight increase in oil prices, a key Canadian export. Canada’s manufacturing sector showed continued expansion, with the S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) edging up to 53.0 in June from 52.9 in May. Oil prices also settled 0.2% higher.
AdThis recent gain follows a period of weakness for the Canadian currency. The loonie had declined by 2.8% in June, marking its largest monthly drop since October 2024.