CAD Weakens as Disappointing Jobs Report Raises Concerns Over Economic Slowdown

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

US Dollar        1.3650-1.3900

Euro                 1.5900-1.6150

Sterling            1.8380-1.8630

WTI Oil (opening level) $64.25

The CAD/USD is opening at 1.3783 ( 0.7255 )

CAD loses ground against the USD on Friday, with USD/CAD pushing higher as traders digest a disappointing Canadian labor market report for July. Weaker employment data is weighing on the Loonie, reinforcing concerns about slowing economic momentum and increasing speculation that the Bank of Canada may lean dovish in the months ahead. 

Headlines

·    Canada lost 41,000 jobs in July, defying forecasts of a 13,500 gain, and maintained a 6.9% unemployment rate, prompting concerns over domestic demand. Trump's 35% aluminum tariff and possible auto-parts duties add pressure on the economy.

·    Nvidia and AMD have reached a groundbreaking agreement to share 15% of revenue from specific chip sales in China with the U.S. government in return for export licenses for Nvidia’s H20 and AMD’s MI308 chips, as reported by the Financial Times.

·    U.S. President Trump and russian President putin will meet in Alaska on August 15 to discuss the Ukraine conflict. Trump announced the meeting, and the Kremlin approved of the location due to its proximity to russia. Plans remain flexible, with a possibility of Ukraine's President Zelensky joining.

·    China's consumer prices held steady in July 2025, exceeding the forecasted 0.1% drop. Non-food prices rose, aided by consumer goods subsidies, with increases in housing, clothing, healthcare, and education sectors. Food prices fell sharply by 1.6%, while transport costs decreased at a slower rate.

·    The FAO Food Price Index increased by 1.6% to 130.1 points in July 2025, the highest since February 2023, due to higher meat and vegetable oil prices. It's 7.6% above July 2024 levels but 18.8% below its March 2022 peak. Meat and vegetable oil prices reached record highs, offsetting declines in other categories.

·    Lithium prices and related equities spiked after battery giant CATL Ltd. halted operations for at least three months at a major mine in China that accounts for around 6% of global output, spurring speculation that Beijing might move to suspend other projects as it tackles overcapacity across the economy.

Key Points

·    Equities: Tech rally; Apple jumps; CPI/PPI ahead; Cisco, Applied Materials, Deere earnings

·    Volatility: VIX near 15; calm but data could spark moves; SPX ±39pts today

·    Digital assets: BTC/ETH higher; Ether ETF inflows strong; crypto stocks mixed

·    Fixed Income: US treasury yields continued their crawl higher ahead of tomorrow’s US CPI data

·    Currencies: USD dips in Asian session to start the week

·    Commodities: Confusion reigns in the gold market, lithium jumps and oil drops on potential peace dividend