The Canadian dollar weakens despite surging oil prices and a stronger-than-expected jobs report, as USD strength persists.
The USD/CAD pair climbed to its highest level since late March, trading above 1.3900 in early Asian trade. The move comes despite a 4.5% rally in WTI crude oil prices, driven by escalating Middle East tensions after Iran’s missile strike on Israel over the weekend.
Canada’s economy added 87,800 jobs in May, exceeding expectations, while the unemployment rate dipped to 6.6%. The data reinforced the loonie’s resilience, though it failed to offset broader USD strength. In the U.S., Nonfarm Payrolls surged by 172K, well above the 85K estimate, keeping Fed rate hike bets alive.
Markets now price in a 70% chance of a Fed rate increase by year-end, supporting the greenback. Geopolitical risks further bolstered the USD’s safe-haven appeal, capping the loonie’s upside despite strong domestic data and rising oil prices.