The Canadian dollar remained above 1.43 per USD, approaching a one-month low of 1.45 reached on March 3, as investors reacted to disappointing labor market data.
CAD pressured by weak job data
While the unemployment rate held steady at 6.6% in February, the economy added just over 1,000 jobs—far below the anticipated 20,000—highlighting a significant slowdown from the strong job gains seen since August 2024. This underwhelming performance reinforced expectations that the Bank of Canada will implement a 25bps rate cut at next week's meeting. Previously, the loonie had been supported by optimism that the Canada-US trade conflict might be less severe than expected, along with a weakening US dollar amid concerns over growth, which further bolstered the Canadian currency.
Tariffs still in focus
Reports indicated that the US Department of Commerce may consider lifting its recently imposed 25% tariffs on USMCA-compliant Canadian goods—following delays on auto tariffs and a reduction in energy tariffs to 10%—while Prime Minister Trudeau announced reciprocal tariffs on $155 billion worth of US imports.
