The Canadian dollar fell to its weakest level since April 2025 after a softer-than-expected jobs report reduced the odds of a Bank of Canada rate hike. The loonie dropped as much as 0.5% against the US dollar to 1.4299, the lowest since US President Donald Trump’s tariff announcement disrupted markets last year. Canadian bonds rallied, with two-year yields falling to a one-month low after employment fell by 68,300 in September, erasing previous gains this year.
Traders had fully priced in a December rate hike due to inflation concerns fueled by Middle East war-driven energy prices. The weak labor data highlighted the impact of US tariffs on Canada’s economy. The unemployment rate rose to 6.5% from 6.4% in August, signaling labor market strain.
Andrew Hazlett of Monex Inc. noted the figures dimmed hike prospects, while Bipan Rai of BMO Asset Management warned of volatile employment data ahead.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing