Story
Canadian Dollar Strengthens to 10-Day High on Weaker US Jobs Report
Summary
The Canadian dollar reached its highest level against the U.S. dollar in 10 days, bolstered by a cooling U.S. labor market and signs of continued expansion in Canada's manufacturing sector.
The Canadian dollar, known as the loonie, rose to its strongest level in 10 days against its U.S. counterpart on Thursday. The currency traded 0.3% higher at 1.4175 per U.S. dollar, or 70.55 U.S. cents, after hitting an intraday peak of 1.4147, a level not seen since June 22. The move was primarily influenced by new economic data from both the United States and Canada.
A key driver for the loonie's strength was a weaker-than-expected U.S. employment report. Data showed that U.S. job growth slowed in June, and payroll figures for the previous two months were revised lower. This suggests a cooling labor market, which has led financial markets to reduce expectations of a near-term interest rate increase from the Federal Reserve, thereby pressuring the U.S. dollar.
In contrast, domestic data from Canada provided support for its currency. The Canadian manufacturing sector continued to expand at a slightly faster pace in June, according to the S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI). The index rose to 53.0 last month from 52.9 in May, indicating growth in production and employment.
AdOther factors also played a role in the currency's movement. The price of oil, a key Canadian export, settled 0.2% higher, providing a slight tailwind. Thursday's gain for the loonie follows a significant 2.8% decline in June, which was its largest monthly drop since October 2024.