Canadian dollar slides as Canada's job growth declines

The Canadian dollar has stabilized on Monday after declining close to 1% on Friday. In the North American session, USD/CAD is trading at 1.4225, up 0.23% on the day.

It has been a roller-coaster for the Canadian dollar, which jumped 1.1% on Thursday but gave up almost all of the gains a day later.

Canada's job growth falls sharply

Canada's economy shed 32.6 thousand jobs in March, the biggest decline since August 2022. This was a sharp reversal from the 1.1 thousand gain in February and much lower than the market estimate of 12 thousand. The unemployment rate rose to 6.7% from 6.6% and the participation rate ticked lower to 65.2% from 65.3%.

The employment data points to weakness in the labor market and the economic chill from the latest US tariffs could lead to further deterioration of the employment landscape.

Businesses are holding back on investment and hiring due to the economic uncertainty and the plunge in oil prices will hurt the economy, as Canada is a major oil producer.

US nonfarm payrolls stronger than expected

US nonfarm payrolls surprised on the upside with a gain of 228 thousand, up from a revised 117 thousand in February and above the market estimate of 135 thousand. This was the strongest nonfarm payroll reading in three months.

The positive employment report was overshadowed by the latest round of US tariffs which have sent the financial markets tumbling lower. There are increasing fears that the US tariffs and expected counter-tariffs could upend the US economy and tip it into a recession.

Investors are hoping that the Trump administration will reduce the tariffs or at least announce negotiations will take place with targeted countries. So far, however, Trump has sounded defiant and said that the tariffs will stay in place.

• USD/CAD tested support at 1.4181 earlier. Below, there is support at 1.4104
• There is resistance at 1.4309 and 1.4386