Markets await US Nonfarm Payrolls and Canadian employment figures, which could sway Fed and BoC policy expectations.
The Canadian Dollar recovered some ground against the US Dollar on Friday, with USD/CAD slipping to 1.3880 after reaching a two-month high of 1.3925 the prior day. The move follows broader USD weakness but may reverse pending US and Canadian jobs reports due later today.
US Nonfarm Payrolls are forecast to rise by 85K in May, down from April’s 115K gain but well above last year’s 10K average. A stronger print could bolster Fed hawks pushing for further rate hikes if inflation persists. In Canada, employment is expected to rebound by 10K after a 17.7K drop in April, though the labor market remains fragile amid a technical recession.
Analysts warn the Canadian Dollar’s recovery may be short-lived, with USD/CAD potentially testing 1.40 as the Bank of Canada faces higher hurdles to tightening than the Fed.