Usdcad sees slight rise amid mixed economic signals from Canada and US

USDCAD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.01%	2 Pips
Week to-date	-0.51%	-70 Pips
June	-0.51%	-70 Pips

Upcoming key events (London Time)

Fri 01:30 PM CAD Labour Force Net Change in Employment
Fri 01:30 PM USD Nonfarm Payroll Employment

What happened lately

In Canada, the Ivey Purchasing Managers Index (PMI) marked an improvement in May 2025, climbing to 53.8 from 52.3 in April. This rise signifies an expansion in business activity, as values above 50 typically indicate growth in the economy. Additionally, the seasonally adjusted PMI also showed an increase, albeit more modest, going up from 47.9 in April to 48.9 in May. Meanwhile, the Bank of Canada maintained its policy interest rate at 2.75%, indicating a steady monetary policy approach amidst these economic developments.

In the United States, economic indicators painted a mixed picture. U.S. Unit Labor Costs rose significantly to 6.6% in the first quarter of 2025 from 5.7% in the previous quarter, highlighting rising compensation expenses for businesses. However, U.S. Nonfarm Business Labor Productivity took a downturn, sliding to -1.5% from -0.8% in the prior quarter, indicating a reduction in output per labor hour. Furthermore, initial unemployment insurance claims slightly increased to 247K for the week ending 31 May 2025, up from a revised figure of 239K, suggesting a modest uptick in jobless claims. These data points reflect underlying challenges such as rising costs and decreased productivity in the U.S. labor market.

The current data releases could influence the USDCAD currency pair. The rise in Canada’s PMI reflects a comparatively stronger economic activity, which could make the Canadian dollar more appealing to investors, potentially exerting downward pressure on USDCAD. Conversely, the U.S. economic data, which points to higher labor costs and declining productivity, might weaken the U.S. dollar. With both countries showing mixed economic signals, the USDCAD pair may continue to consolidate as investors weigh these contrasting economic indicators. Additionally, the upcoming labor force changes in both countries, with Canada’s net employment change and the U.S. nonfarm payroll data release, could provide further catalysts for the currency pair’s movements.

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What can we expect from USDCAD today?

USDCAD on Thursday rose 0.01% to 1.36731. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for USDCAD looks mixed as the pair is likely to consolidate above 1.36408 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.36839 or trades above daily pivot 1.36623. Break above could target R1 at 1.36947. While to the downside, we are looking at 1.36408 (S1) and daily low of 1.36300 as support levels. USDCAD need to break on either side to indicate a short-term bias. A break above 1.36839 may suggest continuation after recent positive movement.

For the week to-date, take note that USDCAD is bearish as the pair posted lower by -0.51%.

Key levels to watch out:

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