Markets are anticipating a fairly stable report when Statistics Canada releases its Labour Force Survey on Friday. While the Net Change in Employment is predicted to rise by 10K in June, adding to the 87.8K gain in May, the Unemployment Rate is forecast to stay at 6.6%.
Despite the report’s tone, the Bank of Canada (BoC) should keep the bar pretty high for changing its policy direction. Indeed, the central bank is expected to keep its policy unchanged at its July 15 meeting, following five consecutive ‘on hold’ decisions since it last lowered rates in October 2025.
The June meeting reinforced the view that the BoC is firmly in wait-and-see mode. That said, policymakers seem willing to look through temporary shocks as long as underlying price pressures remain contained, even as they continue to monitor inflation risks, especially from higher energy prices. With the economy still showing signs of slack, the bank sees little need to change course for now. Moreover, future policy decisions will remain data-dependent, with the bar for another rate hike still appearing relatively high.
So far, market participants expect nearly 15 basis points of tightening from the BoC by year-end, down from around 35 basis points a month ago.
What can we expect from the next Canadian jobs report?
Consensus among analysts sees Canada’s Unemployment Rate at 6.6% last month. Additionally, investors forecast the economy will add around 10K jobs in June. It is worth recalling that Average Hourly Wages rose at an annualised 3.2% in May, suggesting some cooling in wage inflation.
When is the Canadian unemployment rate released, and how could it affect USD/CAD?
In Canada, traders will closely watch Friday’s 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 trading in a consolidative mood since late June, always close to its yearly peaks near 1.4250.
Pablo Piovano, Senior Analyst at FXStreet, points out that further gains in USD/CAD now appear limited by the 1.4250 zone, forcing spot to recede a tad and revisit the mid-1.4100s once again.
“In case the selling pressure gathers traction, the pair’s next relevant support is expected at the provisional 55-day SMA near 1.3900, while the loss of this region exposes a move toward the critical 200-day SMA near 1.3850, all preceding the interim 100-day SMA near 1.3820. A deeper and sustained retracement from here should see the next contention at the May floor at 1.3549 (May 1),” Piovano adds.
On the upside, Piovano sees the next hurdle at the YTD peak of 1.4248 (June 24 and 25). The break above the latter could prompt the pair to attempt a move toward the April 2025 ceiling at 1.4414 (April 1).
“Momentum favours extra gains,” he adds, noting that the Relative Strength Index (RSI) is hovering around 63 and the Average Directional Index (ADX), just over 52, suggests the underlying trend remains pretty solid.
Economic Indicator
Unemployment Rate
The Unemployment Rate, released by Statistics Canada, is the number of unemployed workers divided by the total civilian labor force as a percentage. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labor market and a weakening of the Canadian economy. Generally, a decrease of the figure is seen as bullish for the Canadian Dollar (CAD), while an increase is seen as bearish.
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Next release:
Fri Jul 10, 2026 12:30
Frequency:
Monthly
Consensus:
6.6%
Previous:
6.6%
Source:
Statistics Canada
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
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