FX.co ★ Canadian Dollar Eases

The Canadian dollar has softened to approximately $1.42, pulling back from a peak of $1.41 reached on April 3rd, marking its highest point in nearly four months. This shift is attributed to signs of waning domestic economic health and growing uncertainties in global trade. In Canada, the labor market is showing signs of strain, with 32,600 jobs lost in March and an increase in the unemployment rate to 6.7%, both of which cast a shadow on the economic forecast. Concurrently, crude oil prices, critical to the commodity-supported Canadian dollar, have plummeted over 7%, hitting lows not seen since August 2021 due to oversupply fears tied to OPEC+ and escalating international trade tensions. While the Canadian dollar initially gained from a tariff-free position under recent U.S. protectionist policies, rising trade conflicts, particularly over automobile tariffs, have increased market trepidation. As the Bank of Canada prepares to review monetary policy on April 16th, there is growing anticipation of maintaining a dovish approach in light of recession concerns.