Overview
On Thursday, July 3 2026, the Canadian dollar (loonie) strengthened by 0.3% to trade at 1.4175 per US dollar, equivalent to 70.55 US cents, and reached an intraday high of 1.4147, its strongest level since June 22. The move was driven by weaker US employment data for June, which showed a slowdown in job growth and revisions that lowered payroll gains for the prior two months, prompting markets to scale back expectations of an imminent Federal Reserve rate increase.
US Labor Market Impact
The US job growth slowdown signaled a cooling labour market, reducing the narrative of near‑term Fed tightening. Nick Rees, head of macro research at Monex Europe, noted that the data dented the growing expectation of a Fed rate hike, thereby weakening the US dollar against a basket of major currencies.
Commodity and Domestic Factors
Oil, a key Canadian export, settled 0.2% higher at $68.69 per barrel, providing modest support to the Canadian economy. Domestically, Canada’s manufacturing sector continued to expand, with the S&P Global Canada Manufacturing Purchasing Managers’ Index rising to 53.0 in June from 52.9 in May, reflecting higher production and employment.
Recent Currency Performance
Despite the intraday rally, the loonie recorded a 2.8% decline over June, marking its largest monthly drop since October 2024. The article was generated with AI assistance and reviewed by an editor.