Canadian Dollar Stuck in Tight Range Despite Strong Jobs Report

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.4230-1.4450

Euro                 1.4670-1.4900

Sterling            1.7640-1.7860

WTI Oil (opening level) $71.95

The CAD is opening at 1.4336 ( 0.6927 )

CAD is drifting in the same small range the last few days.

Canada posted stronger-than-expected growth on Friday, but the Canadian dollar showed little reaction.

The economy created 76 thousand jobs in January, crushing the market estimate of 25 thousand and following a December gain of 90 thousand. This marked the sixth straight monthly increase as the labor market remained strong despite a weak economy. The unemployment rate dipped to 6.6%, down from 6.8% and below the market estimate of 6.7%.

The jobs numbers were positive but hanging over the report is the risk of a trade war with the United States, which was narrowly avoided last week when the US imposed and then suspended tariffs against Canada. President Trump suspended the tariffs for 30 days and the Bank of Canada’s next rate decision on March 12 will depend on economic data and whether the tariffs are reinstated.

Headlines

·    Trump’s Tariff Escalation & Retaliation Risks – President Trump’s 25% tariffs on all steel and aluminum imports take effect today, fueling global trade tensions. China’s retaliatory tariffs on US goods have also kicked in, while EU officials warn of swift countermeasures. Markets are weighing whether these moves are bargaining tactics or a structural shift in trade policy.

·    Fed Chair Powell’s Testimony & Inflation Data – Powell’s Congressional testimony (Tuesday & Wednesday) will be closely monitored for rate policy guidance, especially with US CPI data due Wednesday. A hot inflation print could disrupt expectations of two Fed rate cuts in 2025, influencing market sentiment and rate-sensitive assets.

·    Market Volatility & Policy Uncertainty – Investors are navigating rising geopolitical risks, trade uncertainty, and central bank policy shifts. With the ECB’s Lagarde and the BoE’s Mann speaking today, European markets will react to any new monetary policy signals amid ongoing economic headwinds.

Key Points

·    Equities: Amazon -4%, DAX hit by Porsche slump, China AI rally offsets broader Asia weakness

·    Volatility: VIX +6.71%, S&P 500 expected move 1.54%, Nasdaq 2.06%, VIX futures easing

·    Digital Assets: BTC recovered to $97K, crypto stocks mixed, Fear & Greed Index 43, Trump's tariffs could impact mining sector

·    Currencies: USD index rose to 108.2 amid tariff threats and delayed cuts

·    Commodities: Gold near record high, oil up on Iran sanctions, copper, iron ore rise amid supply & trade fears

·    Fixed Income: 2-year Treasury yield hits 2-week high

·    Macro events: Trump’s tariffs, China retaliates, Fed’s Powell testimony, US CPI on Wednesday, earnings-heavy week