Canadian Dollar: Labour resilience favours CAD against US Dollar – TD Securities

TD Securities analysts predict Canada's July jobs data will reinforce the nation's robust labor market. Employment is expected to climb by another 20,000, matching forecasts and further solidifying the recovery from 2026 job losses. Hiring intentions are anticipated to improve in the third quarter, with the unemployment rate expected to fall to 6.4% and wage growth slowing to 3.4% year-on-year due to a significant base effect from July 2024.

The labor market is projected to continue its upward trajectory, with employment forecast to grow by another 20,000 in July, surpassing the market consensus following the recovery of most 2026 job losses in May and June. While services may face a slight slowdown due to a partial withdrawal from recent gains in accommodation and food services, overall payroll employment has shown stronger growth in recent months.

A 20,000 print would result in the unemployment rate decreasing by 0.1 percentage point to 6.4% (market average 6.5%), with wage growth decelerating to 3.4% year-on-year, largely due to the base effect from July 2024.