USD/CAD price climbs amid oil price crash and weak Canada jobs data and trade tensions
USD/CAD edges higher as oil slumps and Canada jobs data fuel bearish sentiment
The Canadian dollar slipped further on Monday, with USD/CAD extending gains to trade near 1.4250 as tumbling oil prices, domestic political uncertainty, and disappointing economic data weighed on the loonie. The move marks a continuation of Friday’s rebound from the pair’s year-to-date low of 1.4025, with risk sentiment and commodity dynamics playing a central role.
Crude oil prices dropped over 7% to a four-year low amid OPEC+ oversupply concerns. Eight member countries moved to end output cuts earlier than expected, triggering fresh fears of a global energy glut. The sharp decline in oil—a major Canadian export—exerted renewed pressure on the CAD. Meanwhile, U.S. President Donald Trump’s broad reciprocal tariffs reinforced recessionary fears that continue to drag down commodity-linked currencies.
USD/CAD price analysis (February 2025 - April 2025) Source: TradingView.
Canada’s economic indicators disappoint
Domestically, the March employment report showed a net loss of 32,600 jobs, pushing the unemployment rate to 6.7%, the highest since late 2022. This raised fresh concerns about Canada's growth outlook just weeks ahead of the April 28 snap elections. With political uncertainty building and global trade dynamics in flux, the Bank of Canada may lean more dovish in its upcoming policy meeting on April 16.
Despite being initially spared from new U.S. tariffs, Canadian exports remain vulnerable. Existing 25% duties on auto, steel, and aluminum products persist, and retaliatory measures are now back on the table. Prime Minister Mark Carney confirmed Canada would keep its auto tariffs in place for non-USMCA-compliant imports, intensifying trade tension risks.
USD steadies after payroll boost, but outlook mixed
The U.S. dollar found modest support from Friday’s stronger-than-expected nonfarm payrolls and hawkish remarks from Fed Chair Jerome Powell. However, fears that tariffs may force the Fed into an eventual rate-cutting cycle limited broader dollar upside. Still, the greenback’s safe-haven appeal amid a global risk-off environment helped lift USD/CAD for a second straight session.
As noted in our earlier coverage, USD/CAD’s slide toward 1.4030 on April 3 followed broad USD weakness and relative strength in the loonie after Trump’s baseline tariff announcement. However, the evolving macro backdrop—especially crude weakness and weak domestic data—has shifted momentum back in favor of the greenback, with traders eyeing 1.43 as the next resistance zone.
