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USD/CAD hits new high above 1.3600 on jobs data from US, Canada

USD/CAD surges above 1.3600, reacting to contrasting jobs data: strong US employment boosts USD while higher Canadian unemployment weakens CAD. Find out where USD/CAD could go ahead of April's Bank of Canada meeting.
Source: Bloomberg
Picture of Glen Frybarger
Glen Frybarger
Senior Content Strategist, Chicago

Data current as of 4/5/2024

Key points

  • USD/CAD rose over 75 pips in recent trade: (0:36)
  • Canadian Unemployment Rate higher than expected at 6.1%: (1:08)
  • US Unemployment Rate lower than expected at 3.8%: (1:51)
  • Nonfarm Payrolls hit 303k in March: (2:39)
  • USD/CAD hits new high above 1.3600: (4:20)

USD/CAD rose over 75 pips in recent trade

USD/CAD saw a notable increase, climbing above 1.3600 to hit new year-to-date highs intraday. The pair has hit 1.3600 on several occasions in recent weeks but has been unable to sustain levels higher, often trading down towards 1.3400. Today's price action continued the trend, with USD/CAD retreating from highs mid-morning.

Canadian Unemployment Rate higher than expected at 6.1%

Canada's recent unemployment rate of 6.1% exceeded forecasts, which had anticipated a slightly lower figure of 5.9%. This weaker-than-expected employment data could give reason for the Bank of Canada to begin lowering interest rates sooner than previously thought, as they attempt to steer unemployment closer to 4%. The anticipation of lowering rates and weakening economic performance often weakens future demand for a currency - and their valuation against other currencies as a result.

US Unemployment Rate lower than expected at 3.8%

In contrast to Canada, the US unemployment rate came in lower than expected at 3.8%, against forecasts of 3.9%. This stronger-than-anticipated labor market performance in the US could bolster investor confidence in the US dollar, affecting currency pairs like USD/CAD by widening the economic performance gap between the two countries.

Nonfarm Payrolls hit 303k in March

The low unemployment rate is closely tied to the substantial job additions reported in Nonfarm Payrolls report. The report revealed 303k added jobs in March, substantially exceeding the expected 200k, and signifying the most robust employment growth seen in the last 10 months. While 2024 has consistently witnessed Nonfarm Payroll figures exceeding expectations, revisions of the previous month's numbers downwards introduce a layer of unpredictability to these otherwise encouraging statistics. This report was no different, with February's 275k number revised down to 270k.

USD/CAD hits new high above 1.3600

The surge in USD/CAD above 1.3600 places the pair approximately 300 pips away from its highest levels since 2020 of around 1.3900. Like its resistance to 1.3600 in 2024, USD/CAD has hit 1.3900 multiple times in recent years but has not traded through it since 2020, when the pair reached prices around 1.4500.

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

Trading forex requires an account with a forex broker like tastyfx. Many traders watch major forex pairs like GBP/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.

You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Our curated playlists can help you stay up to date on current markets and understanding key terms. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.

Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.

Reviewed by:
Frank Kaberna
Director of Strategy, Chicago

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