USDCAD - Jobs data and the Bank of Canada's tight spot
Watching $USDCAD closely today after the Canadian jobs report came in softer than expected. The unemployment rate ticked up, which, coupled with the recent dovish tone from the BoC, makes me wonder if they'll be even more hesitant to follow the Fed on rates. We're seeing $USDCAD push towards the daily highs, currently at 1.41008, up 0.22% on the day after trading between 1.40544 and 1.41021. The market seems to be pricing in a wider rate differential sooner rather than later.
The real question is how long the BoC can maintain a more dovish stance if the Fed keeps signaling a higher-for-longer trajectory. This spread could widen further if upcoming US data reinforces a hawkish Fed. Definitely keeping $USDCAD on the watchlist for a potential break higher if the narrative continues to unfold this way. Also, curious to see how $USDTHB reacts to broader USD strength, currently at 33.695, up 0.28%, after trading in a tight range of 33.57–33.704 today.
That's a solid observation. The BoC's dilemma is getting clearer; a weak jobs report definitely adds pressure for them to hold off. Do you think this could lead to a more sustained divergence between CAD and USD, or is it more of a short-term reaction?