Highest Canadian employment change in 15 months sends USD/CAD lower

Key points

• Canada added 90.4k jobs in April, against 18k expected
• Canada's Unemployment rate held at 6.1%
• USD/CAD dropped 40 pips following the data release

Canada added 90.4k jobs in April, smashing expectations

Canada's labor market delivered a surprise in April, adding 90,400 jobs and far surpassing the forecasted 18,000. This surge, following a month of contraction in employment, illustrates a positive trend for the Canadian economy which has been greatly overshadowed by the neighboring US in 2024. Now with its highest growth since January of 2023, Canadian officials hope for some consistency that has been missing in the employment sector so far this year.

Canadian Unemployment sticks at 6.1%

Despite forecasts predicting a rise to 6.2%, Canada's unemployment rate held steady at 6.1% last month. This steadiness offers a slight reprieve after March's jump to 6.1% marked the highest level since 2022. While still far from the Bank of Canada's goal, officials are hopeful this reading is a sign that unemployment will soon return to the 5% range or lower. For forex traders, a stable unemployment rate can signal economic stability which, in turn, may influence the Canadian dollar's stature in currency pairs.

USD/CAD dropped following positive jobs data

The Canadian dollar strengthened across all major currencies following the data release, including a 40 pip down move in USD/CAD to below 1.3650. This movement showcases the direct impact that labor market data can have on currency prices as trader's speculate on the perceived growth of the Canadian economy and anticipation of future monetary policy actions.

USD/CAD price history

How far can USD/CAD fall?

Earlier this week it looked as though USD/CAD could breakthrough year-to-date highs around 1.3800; now attention shifts to the downside, with 1.3600 in sights after three consecutive days of declines. Not having traded below 1.3600 in a month makes this level a significant marker for traders, potentially setting up a new range or resistance point to monitor closely in their trading strategies.

How to trade USD/CAD

1. Open an account to get started, or practice on a demo account
2. Choose your forex trading platform
3. Open, monitor, and close positions on USD/CAD

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