Canadian Dollar Remains Under Pressure as Investors Await Jobs Data, SocGen Says
The Canadian dollar's stretched levels after climbing above C$1.42 against its US counterpart don't seem to be enticing investors to a near-term rebound with labor-market data on Friday offering economic clues, according to Societe Generale. Since the pair last traded at these levels following the April 2025 tariff shock from President Donald Trump, expectations for higher U.S. interest rates have widened the gap between Canadian and U.S. short-term yields, continuing to support the US dollar, the bank said in a note Tuesday. Monday's Bank of Canada Q2 Business Outlook Survey suggests the recent Middle East conflict has pushed up inflation expectations while pushing Canadian energy producers to lift investment and production. Even so, broader support for the currency remains limited, SocGen said. Attention now turns to Friday's Labour Force Survey, after May's much stronger-than-expected gain of 87,800 jobs, employment growth is expected to slow to around 10,000 in June. The jobs data will help determine whether Canada's improving economic momentum can begin to provide more meaningful support for the loonie, SocGen said.
The Canadian dollar's stretched levels after climbing above C$1.42 against its US counterpart don't seem to be enticing investors to a near-term rebound with labor-market data on Friday offering economic clues, according to Societe Generale.
Since the pair last traded at these levels following the April 2025 tariff shock from President Donald Trump, expectations for higher U.S. interest rates have widened the gap between Canadian and U.S. short-term yields, continuing to support the US dollar, the bank said in a note Tuesday.
Monday's Bank of Canada Q2 Business Outlook Survey suggests the recent Middle East conflict has pushed up inflation expectations while pushing Canadian energy producers to lift investment and production.
Even so, broader support for the currency remains limited, SocGen said.
Attention now turns to Friday's Labour Force Survey, after May's much stronger-than-expected gain of 87,800 jobs, employment growth is expected to slow to around 10,000 in June.
The jobs data will help determine whether Canada's improving economic momentum can begin to provide more meaningful support for the loonie, SocGen said.