|

Canada: Gradual improvement with tariff risks – RBC

Royal Bank of Canada’s (RBC) Nathan Janzen reports that Canada’s labour market strengthened in July, with a 75k employment gain following robust increases in May and June and a decline in the unemployment rate to 6.4%. Despite modest average job growth for 2026, improving conditions are occurring alongside slower population growth, elevated retirements, easing energy prices, and persistent but contained U.S. tariff risks.

Labour data firm but still modest

"Canada's labour market showed further signs of improvement in July with a 75k increase in employment building on 106k increases over May and June, and the unemployment rate ticking down to its lowest level (6.4%) in two years."

"That still leaves average monthly job growth for 2026 to-date at a historically modest 10k/month after a soft start to the year."

"The unemployment rate is a better measure of per-worker labour market conditions, and the tick lower in July left the rate down half a percent from a year ago."

"But it has been improving despite still significant U.S. tariff uncertainty and higher energy prices."

"We continue to look for the unemployment rate to edge lower over the second half of the year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

AUD/USD meets fresh supply and tests 0.7100 amid weak Australian PMIs

AUD/USD has come under fresh selling pressure and is testing 0.7100 in the Asian session on Wednesday. Australia's flash PMIs showed manufacturing slipped into contraction and services expanding slowly for a second straight month, renewing the pair's downside. Furthermore, a bullish US Dollar acts as a headwind for the pair as traders keenly await the crucial Trump-Xi summit on Thursday. Meanwhile, markets shrug off US-Iran indirect talks.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold sticks to losses below $4,350 as USD buying remains unabated amid hawkish Fed

Gold struggles to capitalize on the previous day's goodish rebound from sub-$4,300 levels and meets with fresh supply during the Asian session. The US Dollar extends its recent uptrend, hitting a fresh high since July 30 amid the Federal Reserve's hawkish outlook. This, in turn, is seen as a key factor undermining the non-yielding bullion.

Cardano Bulls push higher as open interest, funding rates rise

Cardano (ADA) extends gains, trading above $0.262 after rallying more than 14% so far this week. The bullish momentum is supported by rising Open Interest (OI), positive funding rates and signs of whale accumulation. If buying pressure persists, ADA could extend its rally and target higher levels. Cardano’s derivatives metrics show strengthening conditions.

Trump meets Xi: Why markets are watching this summit so closely

United States President Donald Trump and Chinese President Xi Jinping are set to meet in Washington on Thursday for a summit closely watched by markets. After several months of easing trade tensions between the US and China, the meeting could determine whether the world's two largest economies extend their truce or enter a new period of uncertainty.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.