Canada loses 68.3K jobs and the Loonie falls to an 18-month low
Canada lost 68.3K jobs in September against a forecast for a 7K gain, and with August's 41.7K loss it has given back all of its net job gains for 2026.
Canada's economy shed 68.3K jobs in September, falling short of the 7K gain forecast and erasing all of its net job gains for 2026. The unemployment rate climbed to 6.5%, matching expectations as about 53K people exited the labour force. Traders adjusted their anticipations for a Bank of Canada hike, now projecting the next rate increase for December instead of October 28.
The Bank of Canada's 2.25% rate remains 1.5 points below the Federal Reserve's 3.75%-4.00% range, a gap that has driven the USD/CAD exchange rate higher since early September. The University of Michigan sentiment index dropped to 46.3, its lowest second reading on record, while year-ahead inflation expectations rose to 4.7% and 10-year Treasury yields stayed above 5.25%, leading to a short-term rise in USD/CAD.
The Canadian Dollar's value is heavily influenced by interest rates, oil prices, the economy's health, inflation, trade balance, and market sentiment. The Bank of Canada's interest rate policy affects the CAD positively with higher rates, while oil prices have an immediate impact due to Canada's large export market. Inflation, typically seen as detrimental to a currency, has actually strengthened the CAD in modern times due to relaxed capital controls, attracting global investors seeking lucrative returns. Macroeconomic data like GDP, employment, and consumer sentiment also play a role in CAD valuation.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
