Statistics Canada will release its Labour Force Survey on Friday, and markets are bracing for quite a steady print. The Unemployment Rate is expected to remain at 6.9% in May, while the Net Change in Employment is forecast to increase by 10K, reversing April’s 17.7K drop.
Despite the report’s tone, the bar for the Bank of Canada (BoC) to change its policy direction should remain pretty high. Indeed, the central bank is expected to keep its policy unchanged at its June 10 gathering, following four consecutive ‘on hold’ decisions.
At its latest event, the BoC signalled an upbeat medium-term outlook for economic growth while revising inflation higher for the current year. In addition, Governor Tiff Macklem delivered a cautious message at his press conference, keeping the data-dependent stance well in place while allowing for higher rates if energy prices remain elevated.
So far, market participants expect around 34 basis points of tightening by the central bank by year-end.
What can we expect from the next Canadian jobs report?
Consensus among analysts sees Canada’s Unemployment Rate at 6.9% last month. Additionally, investors forecast the economy will add around 10K jobs in May, surpassing the 17.7K loss recorded in the prior month. It is worth recalling that Average Hourly Wages rose at an annualised 4.8% in April (from 4.7%), pointing to sticky wage inflation.
When is the Canada Unemployment Rate released, and how could it affect USD/CAD?
All eyes in Canada will be on Friday’s release of the jobs report, due at 12:30 GMT. A stronger print could give the Canadian Dollar (CAD) a quick lift, but don’t expect fireworks.
USD/CAD has been on a steady uptrend since the beginning of May, almost entirely to the tune of developments in the Middle East and dynamics around its North American peer.
Pablo Piovano, Senior Analyst at FXStreet, points out that USD/CAD has been edging higher over the last few weeks, hitting fresh two-month tops north of 1.3900 the figure on June 4. The surpass of the latter could prompt spot to embark on a potential trip toward the 2026 ceiling of 1.3966 recorded on March 31. So far, the constructive outlook is expected to remain intact while above the 200-day SMA around 1.3810.
On the other hand, he highlights minor support at the weekly floor of 1.3770 (May 29), seconded by the provisional 55-day and 100-day SMAs at 1.3761 and 1.3719, respectively. Down from here emerges the May bottom at 1.3549 (May 1), closely followed by the March base at 1.3525 (March 9), the February trough at 1.3504 (February 11) and the 2026 valley at 1.3481 (January 30).
“Momentum favours extra gains, with caution,” he adds, noting that the Relative Strength Index (RSI) is flirting with the overbought region past the 69 level, and the Average Directional Index (ADX) just over 25 suggests the underlying trend appears to be gathering traction.
Economic Indicator
BoC Interest Rate Decision
The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country.
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Last release:
Wed Apr 29, 2026 13:45
Frequency:
Irregular
Actual:
2.25%
Consensus:
2.25%
Previous:
2.25%
Source:
Bank of Canada
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it.
Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
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