Canada unemployment rate (Jun) actual: 6.9% vs 7.0% previous; est 7.1%

Canada unemployment rate (Jun) actual: 6.9% vs 7.0% previous; est 7.1%

The Canadian Unemployment Rate is projected to rise further in June, according to market expectations. The latest data from Statistics Canada shows that the rate increased to 7.0% in May, up from 6.9% in April. Market participants anticipate a slight rise to 7.1% in June, which could influence the Bank of Canada's (BoC) monetary policy and the value of the Canadian Dollar (CAD).

The BoC kept its policy rate at 2.75% at its June meeting, citing elevated uncertainty surrounding trade policies. However, the central bank suggested that another rate cut could be necessary in July if tariffs cause the economy to weaken. Governor Tiff Macklem warned that ongoing uncertainty about trade negotiations and new trade measures would constrain the bank's ability to look far ahead.

The labour market in Canada has been cooling, with job losses concentrated in trade-intensive sectors. The BoC noted that employment had so far held up in sectors less exposed to trade but warned that businesses were generally indicating plans to scale back hiring. According to TD Securities, Canadian labour markets will remain under pressure in June, with total employment forecast to hold unchanged as the unemployment rate rises to 7.1%.

The Canadian Unemployment Rate for June, accompanied by the Labour Force Survey, will be released on Friday at 12:30 GMT. The BoC could potentially lower its interest rate at its next meeting due to the further cooling of the labour market, which could lead to selling pressure on the CAD. This could support the ongoing rebound in USD/CAD that was sparked last week.

Senior Analyst Pablo Piovano from FXStreet notes that the Canadian Dollar had given up some of its recent gains, causing USD/CAD to rise from levels last observed in early October 2024 in the 1.3550-1.3540 band to the vicinity of 1.3700 the figure at the start of the week. Piovano indicates that the resurgence of the bearish tone could motivate USD/CAD to revisit its 2025 bottom at 1.3538, which was marked on June 16.

References:
[1] https://www.mitrade.com/insights/news/live-news/article-6-950692-20250711