Canadian Dollar Slips to Two-Week Low Amid U.S. Tariff Threat, Solid Jobs Data Limits Losses

The Canadian dollar weakened to a two-week low against the U.S. dollar on Friday following renewed tariff threats from U.S. President Donald Trump. However, stronger-than-expected domestic job growth helped ease some of the pressure on the loonie, bolstering expectations that the Bank of Canada (BoC) will hold interest rates steady later this month.
The currency dipped 0.2% to trade at 1.3685 per U.S. dollar, or 73.07 U.S. cents, after hitting an intraday low of 1.3731—its weakest level since June 27. For the week, the Canadian dollar was set to fall 0.6%.
Canada’s economy added 83,100 jobs in June, significantly exceeding expectations of no change, while the unemployment rate edged down to 6.9% from 7%. The stronger labor market performance has led investors to increase the odds of a BoC rate hold on July 30 to 83%, up from 73% prior to the data release.
President Trump’s announcement of a 35% tariff on Canadian imports, effective August 1, added uncertainty to the outlook, though exemptions under the United States-Mexico-Canada Agreement (USMCA) are expected to remain. Meanwhile, oil prices, a key Canadian export, rebounded 2.6% to $68.31 per barrel, supporting the loonie’s broader fundamentals. Canadian bond yields also rose, with the 10-year yield reaching 3.502%, the highest since mid-January.