Loonie Firms Slightly

2025-10-10 12:58 By Luisa Carvalho 1 min. read

The Canadian dollar strengthened slightly, trading just below 1.40 per US dollar, as traders pared back expectations of an October rate cut by the Bank of Canada following a stronger-than-expected jobs report.

Canada’s unemployment rate held steady at 7.1% in September 2025, below forecasts of 7.2% but still at its highest level since August 2021.

Meanwhile, employment rose much more than anticipated, suggesting that labor market slack is not building as quickly as once thought, which could delay the timing of further interest rate cuts.

Stronger-than-expected job growth also points to continued resilience despite ongoing trade frictions with the US.

Policymakers cut the policy rate to 2.5% at their September meeting for the first time since March to support the economy.

Markets are now pricing in a 57% chance of a rate cut this month, down from 72% before the data release.

However, further gains in the loonie were capped by a sharp drop in oil prices.



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