• The Canadian Unemployment Rate is expected to hold steady in June.
• The BoC is expected to keep its policy unchanged at its July 15 event.
• The Canadian Dollar has moved into a consolidative phase vs the US Dollar.

Markets are anticipating a fairly stable report when Statistics Canada releases its Labour Force Survey on Friday. While the Net Change in Employment is predicted to rise by 10K in June, adding to the 87.8K gain in May, the Unemployment Rate is forecast to stay at 6.6%.

Despite the report's tone, the Bank of Canada (BoC) should keep the bar pretty high for changing its policy direction. Indeed, the central bank is expected to keep its policy unchanged at its July 15 meeting, following five consecutive ‘on hold’ decisions since it last lowered rates in October 2025.

The June meeting reinforced the view that the BoC is firmly in wait-and-see mode. That said, policymakers seem willing to look through temporary shocks as long as underlying price pressures remain contained, even as they continue to monitor inflation risks, especially from higher energy prices. With the economy still showing signs of slack, the bank sees little need to change course for now. Moreover, future policy decisions will remain data-dependent, with the bar for another rate hike still appearing relatively high.

So far, market participants expect nearly 15 basis points of tightening from the BoC by year-end, down from around 35 basis points a month ago.

What can we expect from the next Canadian jobs report?

Consensus among analysts sees Canada’s Unemployment Rate at 6.6% last month. Additionally, investors forecast the economy will add around 10K jobs in June. It is worth recalling that Average Hourly Wages rose at an annualised 3.2% in May, suggesting some cooling in wage inflation.

When is the Canadian unemployment rate released, and how could it affect USD/CAD?

In Canada, traders will closely watch Friday’s jobs report, due at 12:30 GMT. A stronger print could give the Canadian Dollar (CAD) a quick lift, but don’t expect fireworks.

USD/CAD has been trading in a consolidative mood since late June, always close to its yearly peaks near 1.4250.

Pablo Piovano, Senior Analyst at FXStreet, points out that further gains in USD/CAD now appear limited by the 1.4250 zone, forcing spot to recede a tad and revisit the mid-1.4100s once again.

“In case the selling pressure gathers traction, the pair’s next relevant support is expected at the provisional 55-day SMA near 1.3900, while the loss of this region exposes a move toward the critical 200-day SMA near 1.3850, all preceding the interim 100-day SMA near 1.3820. A deeper and sustained retracement from here should see the next contention at the May floor at 1.3549 (May 1)," Piovano adds.

On the upside, Piovano sees the next hurdle at the YTD peak of 1.4248 (June 24 and 25). The break above the latter could prompt the pair to attempt a move toward the April 2025 ceiling at 1.4414 (April 1).

“Momentum favours extra gains,” he adds, noting that the Relative Strength Index (RSI) is hovering around 63 and the Average Directional Index (ADX), just over 52, suggests the underlying trend remains pretty solid.

Economic Indicator

Net Change in Employment

The Net Change in Employment released by Statistics Canada is a measure of the change in the number of people in employment in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending and indicates economic growth. Therefore, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.

Canada’s labor market statistics tend to have a significant impact on the Canadian dollar, with the Employment Change figure carrying most of the weight. There is a significant correlation between the amount of people working and consumption, which impacts inflation and the Bank of Canada’s rate decisions, in turn moving the C$. Actual figures beating consensus tend to be CAD bullish, with currency markets usually reacting steadily and consistently in response to the publication.

Bank of Canada FAQs

The Bank of Canada (BoC), based in Ottawa, is the institution that sets interest rates and manages monetary policy for Canada. It does so at eight scheduled meetings a year and ad hoc emergency meetings that are held as required. The BoC primary mandate is to maintain price stability, which means keeping inflation at between 1-3%. Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Canadian Dollar (CAD) and vice versa. Other tools used include quantitative easing and tightening.

In extreme situations, the Bank of Canada can enact a policy tool called Quantitative Easing. QE is the process by which the BoC prints Canadian Dollars for the purpose of buying assets – usually government or corporate bonds – from financial institutions. QE usually results in a weaker CAD. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The Bank of Canada used the measure during the Great Financial Crisis of 2009-11 when credit froze after banks lost faith in each other’s ability to repay debts.

Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Bank of Canada purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the BoC stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Canadian Dollar.

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.