USD/CAD Consolidates at Monthly Peaks Ahead of Critical Jobs Reports

2026-01-15 13:47:31

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The US Dollar strengthens against the Canadian Loonie on Thursday, with USD/CAD holding steady near multi-week highs around 1.3875—marking levels last seen on December 5. For traders converting 60000 USD to CAD, current exchange rates translate to approximately 83,250 CAD, reflecting the Greenback’s persistent outperformance. Despite the Dollar’s momentum, the pair struggles to build conviction as crude oil’s rebound provides a stabilizing force for the Canadian currency.

Oil Support and Trade Dynamics

West Texas Intermediate crude sits at $57.22, climbing nearly 1.78% after earlier pressure linked to US geopolitical activities in Venezuela and tightened American oversight on Venezuelan oil shipments. This recovery offers timely relief to the Canadian economy given its substantial crude export exposure. Meanwhile, the trade deficit data delivered a surprise compression to $29.4 billion in October—substantially better than the $58.9 billion forecast and a major improvement from September’s $48.1 billion gap.

Labor Market Signals Shape Dollar Direction

Initial Jobless Claims ticked slightly higher to 208,000 in the week ending January 3, marginally below the 210,000 consensus but climbing from the prior week’s 200,000 level. Continuing jobless claims rose to 1.914 million, suggesting persistent softness in labor market momentum. The four-week moving average eased to 211,750, hinting at mixed employment conditions.

Friday’s NFP Report as Key Catalyst

All eyes now focus on Friday’s nonfarm payrolls release, with economists penciling in a 60,000 job gain for January following December’s 64,000 increase. A weaker-than-expected print could reinforce bets on additional Federal Reserve rate cuts, potentially weighing on the Dollar. Conversely, a beat would likely temper easing expectations. Markets currently price approximately two Fed cuts through 2026.

Canadian Labor Data and BoC Outlook

North of the border, Canada’s October trade balance swung to a C$0.58 billion deficit from September’s C$0.24 billion surplus—smaller than feared. Friday’s Canadian employment report looms large, with net job creation forecast to drop 5,000 positions in December after November’s robust 53,600 gain. The Bank of Canada is widely anticipated to maintain rates throughout most of 2026, offering limited policy catalysts for CAD strength in the near term.

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