Recently, ahead of the release of the US non-farm payroll data, the exchange rate of the US dollar against the Canadian dollar has retreated, approaching 1.3800. The market's expectations for a rate cut by the Federal Reserve in September have strengthened, becoming one of the reasons for the fluctuations in the currencies of the two countries. It is expected that the US non-farm payrolls will increase by about 75,000 in August, while Canada has provided support to businesses affected by US tariffs.

Recently, the momentum of the US dollar's four consecutive rises against the Canadian dollar has slightly paused in the Asian market, with the exchange rate hovering around 1.3810. The performance of the US employment report data has been less than satisfactory, putting some pressure on the dollar. Investors are paying attention to how this data might impact the Federal Reserve's policy decision in September. Economists predict that the US non-farm payrolls in August will increase to about 75,000, while the unemployment rate may remain around 4.3%.

If employment data continues to weaken, it may increase the probability of the Federal Reserve cutting interest rates, thereby putting greater downward pressure on the dollar. Market expectations for a rate cut by the Federal Reserve of up to 25 basis points have surged to over 99%, a significant increase from 87% a week ago.

At the same time, the recent unemployment claims in the United States have also increased to 237,000, exceeding the market expectation of 230,000. This dynamic may intensify market anxiety. In addition, the ADP employment change data shows that 54,000 new jobs were added in August, lower than the expected 65,000. It is worth noting that the data for July was revised from 104,000 to 106,000.

Earlier this week, it was reported that the U.S. government plans to impose semiconductor import tariffs on companies that do not relocate production to the United States and intends to renegotiate the USMCA, which may bring some uncertainty to the market.

Canada has announced plans to provide financial support to domestic producers affected by U.S. tariffs, with a particular focus on the steel, aluminum, and automotive industries. The Minister of Industry stated that more support measures will be introduced. The Prime Minister emphasized that negotiations with the U.S. are progressing, focusing on the strong integration of their supply chains.

Investors may pay attention to the employment market report released by Statistics Canada later. It is expected that the Canadian dollar will see a net increase of 7,500 jobs in the August employment changes, compared to a decline of 40,800 jobs last month. The unemployment rate may rise slightly from 6.9% to around 7%.

Common questions about the Canadian dollar include factors that drive the Canadian dollar such as the Bank of Canada's interest rate decisions, oil prices, economic health, and trade balance; the health of the U.S. economy is also not to be overlooked.

Disclaimer: The above information is for reference only and does not constitute investment advice. Past performance is not indicative of future results.