The USD/CAD pair retraced its Friday gains and traded near 1.3680 during Monday’s Asian session. The Canadian Dollar edged higher as the US Dollar corrected lower after posting roughly a 0.50% gain on Friday, supported by stronger-than-expected US jobs data for May.
The US Bureau of Labor Statistics (BLS) reported Nonfarm Payrolls rose by 139,000 last month, surpassing the consensus forecast of 130,000 and just shy of April’s revised 147,000 increase. The unemployment rate held steady at 4.2%, while average hourly earnings remained steady at 3.9%, both figures beating market expectations.
These robust employment figures boosted bets that the Federal Reserve will keep its benchmark interest rate steady at its next two policy meetings, tempering further US Dollar strength.
Market sentiment also improved amid easing trade-war concerns. Following a call between US President Donald Trump and Chinese President Xi Jinping on Thursday, both sides agreed to resume trade negotiations aimed at resolving the ongoing tariff dispute. US Treasury Secretary Scott Bessent and two other officials from the Trump administration are scheduled to meet Chinese counterparts on Monday in London.
The prospect of progress in US-China talks eased fears over the impact of US steel and aluminum tariffs on Canadian exports. Last week, President Trump doubled tariffs on these metals from 25% to 50%, drawing sharp criticism from Canadian Prime Minister Mark Carney, who labeled the move “unlawful and unjustified.” Carney emphasized that Canada remains engaged in intense negotiations to secure the removal of these tariffs as part of a broader economic and security partnership with the United States.
With trade tensions showing signs of easing, the Canadian Dollar found support, limiting the USD/CAD advance as the US Dollar corrected lower.
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