Canadian labour markets shows signs of firming in January – RBC Economics

FXStreet Insights Team FXStreet

Canadian labour markets surprised broadly on the upside for a second straight month in January, with employment rising solidly and the unemployment rate unexpectedly slipping lower, RBC Economics’ Assistant Chief Economist Claire Fan notes.

Unemployment rate is still up almost a percentage point from a year ago

“It is probably too early to give labour markets the all clear – the unemployment rate is still up almost a percentage point from a year ago and wage growth slowed to its lowest year-over-year rate since May 2022. But the unemployment rate may be closer to peaking (or have peaked) earlier than feared.”

“The BoC signaled following their January rate cut that further reductions would be contingent on economic data continuing to look soft so another round of firm looking labour market data reduces the urgency for the BoC to cut again in March.”

“Still, interest rates are at relatively high levels relative to a soft economic backdrop, household spending has shown signs of picking up, but business spending is still very soft. There remain significant risks that U.S. tariffs could be announced before the March policy meeting, and another round of labour market and inflation data still to be released before then.”

Author

FXStreet Insights Team

FXStreet

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.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD corrects lower, returns to 1.1650

EUR/USD could not sustain an earlier move to fresh tops just above 1.1680 on Thursday, coming under fresh selling pressure and revisiting the mid-1.1600s in the latter part of the NA session. The pair’s correction comes in response to an acceptable bounce in the US Dollar.

GBP/USD attempts some consolidation near 1.3350

GBP/USD is alternating gains with losses near 1.3350 on Thursday. The Greenback’s attempts to recover aren't really sticking, upbeat data or not, as traders stay confident that the Fed will deliver a 25 bps rate cut at its final meeting of the year.

Gold flat lines near $4,200 ahead of US PCE inflation release

Gold price (XAU/USD) trades on a flat note near $4,205 during the early Asian trading hours on Friday. Rising US Treasury yields and upbeat US jobs data cap upside for the precious metal. Traders might prefer to wait on the sidelines ahead of the key US inflation data. The US delayed the Personal Consumption Expenditures Price Index report for September, which will be published later on Friday.

XRP slides amid record on-chain activity, mixed technical signals

Ripple (XRP) is trading under pressure at the time of writing on Thursday, after bulls failed to break the short-term resistance at $2.22. The reversal may extend toward Monday’s low of $1.98, especially if risk-off sentiment persists in the broader cryptocurrency market.

Why the Fed may cut rates in December: Understanding the policy shift

The Fed has gone through a noticeable policy swing in recent months - from initiating a rate cut, to signaling a potential pause, and now shifting once again toward another cut in December. This has created understandable confusion among traders and investors trying to interpret the Fed’s reaction function.

XRP edges lower despite record on-chain activity and steady ETF inflows

Ripple is trading under pressure at the time of writing on Thursday, after bulls failed to break the short-term resistance at $2.22. The reversal may extend toward Monday’s low of $1.98, especially if risk-off sentiment persists in the broader cryptocurrency market.