Canada's job market expected to flatline, Canadian Dollar under pressure

Kenny Fisher MarketPulse

The Canadian dollar has posted losses in the European session. USD is trading at 1.3702, up 0.34% on the day. Earlier, the Canadian dollar weakened to 1.3731, its lowest level since June 27.

Canada's job growth has stalled

Canada releases the June employment report later today. Job growth has stalled since January and the economy created just 8800 jobs in May. The markets are braced for worse news in June with a consensus of no growth. The unemployment rate has been steadily increasing and is expected to rise to 7.1% from 7.0%, compared to 6.2% a year ago.

The labor market may have stalled but there is some relief that the US tariffs haven't resulted in worse employment numbers. US President Trump threatened on Thursday to impose a punishing 35% tariff rate on Canadian goods, a dramatic escalation in the trade war between the two countries. Canada and the US have been engaged in trade talks but the new round of tariffs are scheduled to take effect on August 1. The tariffs would be damaging for Canada's economy, chilling growth and boosting inflation.

Fed split over interest rate cuts

Will the Federal Reserve lower interest rates at the July 30 meeting? The money markets don't think so, with a 93% probability of a hold, according to the FedWatch CME tool. Still, this week's FOMC minutes from the June meeting indicated that some members are in favor of a July rate cut and the Fed is expected to cut at least once before the end of the year.

Inflation is running at 2.4%, high than the Fed's target of 2%. A key question is how tariffs will impact on inflation - so far, tariffs have not had much effect on inflation but that could change in upcoming inflation reports. The US releases June inflation next week and inflation is expected to tick higher to 2.5%.

USD/CAD technical

USD/CAD has pushed above resistance at 1.3672 and is testing resistance at 1.3691. Above, there is resistance at 1.3726.
1.3637 and 1.3718 are the next support levels.

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.