USD/CAD declines after mixed US job report

USD/CAD retreats to 1.4305 after softer-than-expected US NFP data.
US Unemployment declined to 4% while hourly earnings remained stable.
Canadian unemployment falls to 6.6%, but remains above forecasts.

Patricio Martín FXStreet

The USD/CAD pair pulled back to 1.4305 following the release of January's Nonfarm Payrolls (NFP) data, which fell significantly short of expectations. The report showed the US economy added just 143K jobs, well below the 307K forecast, triggering a pullback in the US Dollar. Meanwhile, the unemployment rate ticked down to 4%, aligning with market projections, while wage growth remained firm.

While the headline NFP figure disappointed, wage growth remained stable. Average hourly earnings rose by 0.5% month-over-month as expected, while the annual figure edged up to 4.1%, surpassing the 3.9% estimate. Additionally, the labor force participation rate improved slightly to 62.6% from 62.5%, suggesting continued resilience in employment metrics despite weaker hiring trends.

On the Canadian side, unemployment declined to 6.6%, improving from 6.8% but still exceeding the projected 6.7%. The data suggests that while job conditions in Canada have somewhat improved, lingering softness in the labor market could keep the Bank of Canada (BoC) cautious regarding future rate adjustments.

USD/CAD Technical outlook

USD/CAD retraced to 1.4305, marking a moderate pullback but indicators including the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) look weak on the daily scale. The pair remains in an downtrend in the short-term after losing the 20-day Simple Moving Average (SMA), but buying pressure could persist if sellers fails to secure the 1.4300 support zone.

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

AUD/USD regains mild traction, falters near 0.7150

AUD/USD gathers some steam and manages to flirt with the 0.7150 level on Thursday. However, the pair has retraced some of Wednesday’s significant pullback due to renewed selling pressure on the Greenback and a slight improvement in risk sentiment following hopes of a deal in the Middle East. Wrapping up the Australian docket, the RBA’s Hauser will speak early on Friday.

USD/JPY trades below 160.00 intervention threshold; bullish bias intact

The USD/JPY pair attracts some sellers during the Asian session amid fears that authorities will step in again to prop up the Japanese Yen. Furthermore, the Israel-Lebanon truce prompts some profit-taking around the US Dollar and exerts downward pressure on the currency pair.

Gold puts its 200-day SMA to the test near $4,420

Gold keeps the bullish stance in place in the latter part of Thursday’s session, although a convincing break above the key $4,500 mark per troy ounce still remains elusive. The precious metal’s advance comes amid the resurgence of some selling interest around the Greenback, improving risk sentiment, and declining US Treasury yields across the board.

XRP plummets as ETF outflows, geopolitical tensions reinforce bearish outlook

Ripple (XRP) edges lower, trading around $1.15 at the time of writing on Thursday, its lowest price since February 6. The cross-border money remittance token is extending the sell-off for the fifth consecutive day, reflecting persistent headwinds from ongoing geopolitical tensions and investor uncertainty.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.