• In Canada, jobs declined modestly in July by 6,400.
• In the US, Nonfarm Payrolls rose by 187,000, falling below the market consensus of 200,000.
• Both the US Dollar and the Loonie weakened across the board after the release of the data.

The USD/CAD initially dropped and then experienced a significant increase, reaching its highest level since early June, just below 1.3400. This movement in the currency pair was driven by employment data from both Canada and the US. As of the current writing, the pair is hovering around 1.3360, below the level it had before the release of the reports.

Canada and US jobs data below expectations 

In Canada, the economy lost 6,400 jobs in July, against expectations of a 21,100 increase. The Unemployment rate rose to 5.5%. This is the first time since COVID that the unemployment rate has increased for three consecutive months. These numbers triggered a decline in the Canadian Dollar across the board.

The fact that the USD/CAD is hovering around the same level is attributed to the US jobs report, which also came in below market estimates and led to a decline in the value of the US Dollar. The Loonie is falling sharply versus NZD and AUD. 

The US economy added 187,000 jobs in July, falling short of the expected 200,000. On a positive note, the Unemployment Rate fell from 3.6% to 3.5%. Average Hourly Earnings rose by 4.4% compared to a year ago, surpassing the market consensus of 4.2%.

US Treasury yields initially spiked but then reversed their course, weighing on the US Dollar. The DXY is down 0.30% for the day, trading below 102.20