The Unemployment Rate in Canada remained unchanged at 7.1% in September, Statistics Canada reported on Friday. This reading came in better than the market expectation of 7.2%. The Net Change in Employment came in at 60.4K in this period, surpassing analysts’ estimate for an increase of 5K by a wide margin.
Other details of the publication revealed that the Participation Rate edged higher to 65.2% from 65.1% and the annual wage inflation held steady at 3.6%.
“The employment increase in September was concentrated in full-time work (+106,000; +0.6%),” Statistics Canada noted in its press release. “In comparison, part-time employment fell by 46,000 (-1.2%) in September. Both full-time and part-time employment were little changed compared with the beginning of the year.”
Market reaction to Canada employment data
USD/CAD came under bearish pressure following this report and was last seen losing 0.28% on the day at 1.3985.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | 0.16% | -0.20% | -0.26% | 0.02% | 0.12% | -0.17% | |
| EUR | 0.05% | 0.26% | -0.19% | -0.21% | 0.11% | -0.06% | -0.01% | |
| GBP | -0.16% | -0.26% | -0.43% | -0.51% | -0.15% | -0.10% | -0.33% | |
| JPY | 0.20% | 0.19% | 0.43% | 0.04% | 0.29% | 0.33% | 0.13% | |
| CAD | 0.26% | 0.21% | 0.51% | -0.04% | 0.23% | 0.35% | 0.18% | |
| AUD | -0.02% | -0.11% | 0.15% | -0.29% | -0.23% | 0.08% | -0.18% | |
| NZD | -0.12% | 0.06% | 0.10% | -0.33% | -0.35% | -0.08% | -0.25% | |
| CHF | 0.17% | 0.00% | 0.33% | -0.13% | -0.18% | 0.18% | 0.25% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
This section below was published as a preview of the Canada employment data at 06:00 GMT.
- The Canadian Unemployment Rate is seen edging higher in September.
- Extra cooling of the labour market could reinforce additional rate cuts.
- The Canadian Dollar remains sidelined below the 1.4000 barrier so far.
Statistics Canada will release its Labour Force Survey on Friday, and markets are bracing for a mixed print. The Unemployment Rate is expected to tick higher to 7.2% in September, while the Employment Change is forecast to rise by 5K new workers after a huge loss in August.
A weaker report could strengthen the case for the Bank of Canada (BoC) to continue its easing cycle after cutting its policy rate by 25 basis points to 2.50% at its September 17 gathering, following three consecutive pauses.
At the event, Governor Tiff Macklem struck a cautious tone at his usual press conference. He said the inflation picture hasn’t changed much since January, noting mixed signals and a more data-dependent stance as the bank takes decisions “one meeting at a time.” He also acknowledged that inflationary pressures look a little more contained but reiterated that policymakers remain ready to act if risks tilt higher.
In addition, Senior Deputy Governor Carolyn Rogers added that no change in the deposit rate is being contemplated, while Macklem said the BoC is “a long way from even contemplating QE.” The Governor also pushed back against recession fears, forecasting around 1% growth in H2 2025. Overall, the tone suggested a steady hand, with no rush to adjust policy as the bank awaits clearer inflation trends.
The August prints from the domestic labour market saw the Unemployment Rate tick higher to 7.1%, while the Employment Change dropped for the second consecutive month, this time by 65.5K individuals.
What can we expect from the next Canadian Unemployment Rate print?
Consensus among market participants projects a slight rise in Canada’s Unemployment Rate to 7.2% last month, up from August’s 7.1%. Additionally, investors forecast the economy will add a modest 5K jobs in September, enough to reverse the last couple of months of declining job creation. It is worth recalling that Average Hourly Wages, a proxy for wage inflation, rose at an annualised 3.6% in August, up from the previous 3.5%.
According to analysts at TD Securities: “We look for employment to rise by 5K in September for a muted rebound after two months of heavy layoffs. Service sector hiring should drive the headline print alongside a mixed performance for goods-producing industries.”
When is the Canada Unemployment Rate released, and how could it affect USD/CAD?
The Canadian Unemployment Rate for September, accompanied by the Labour Force Survey, will be released on Friday at 12:30 GMT.
Markets see around a 70% chance of another quarter-point rate cut by the BoC at its October 29 meeting, while implied rates forecast nearly 25 basis points of easing by year-end. A soft print from the job market should add to the likelihood of lower rates later in the month, which in turn could weigh on the performance of the Canadian Dollar (CAD).
Senior Analyst Pablo Piovano from FXStreet notes that the Canadian Dollar has moved into a consolidative theme since late September, always below the key 1.4000 hurdle, while gains remain capped by the critical 200-day SMA near 1.3980.
Piovano indicates that the resurgence of a bullish tone could motivate USD/CAD to challenge the October ceiling at 1.3986 (October 2), prior to the May top at 1.4015 (May 13). A sustainable upward bias from here should retarget the April high at 1.4414 (April 1).
On the other hand, Piovano suggests that provisional contention emerges at the 55-day and 100-day SMAs at 1.3822 and 1.3761, respectively. The loss of this region could spark a potential move toward the September base at 1.3726 (September 17). A deeper retracement could prompt a test of the July valley at 1.3556 (July 3) to re-emerge on the horizon.
“Furthermore, momentum indicators lean bullish: the Relative Strength Index (RSI) hovers past 62, while the Average Directional Index (ADX) is near 24, indicating a firm trend,” he says.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
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