FX.co ★ Canadian Dollar Eases to 1.4 per USD

The Canadian dollar has weakened to approximately 1.40 per USD, pulling back from the five-month peak of 1.378 observed on May 6th. This decline is influenced by dovish expectations from the Bank of Canada and persistent trade uncertainties. The labor market showed only a modest addition of 7,400 jobs, coupled with an increase in the unemployment rate to 6.9% in April, intensifying market speculation that the Bank of Canada might consider a rate cut as early as June. This prospect has diminished the appeal of the Canadian dollar. On the trade front, tensions with the United States have reemerged following comments from Canada's ambassador to Washington. The ambassador indicated that lifting the Trump-era steel and aluminum tariffs would be Ottawa's "starting point" for any future USMCA negotiations, reflecting the ongoing bilateral issues. Despite this, there is a sense of reassurance within the domestic political arena. Prime Minister Carney's decision to appoint former Goldman Sachs banker Tim Hodgson as the Minister of Natural Resources has been widely received. This appointment is viewed as a strategic move to enhance Canada's strengths in the energy and mining sectors.