CAD: Jobs data and geopolitics steer rates – TD Securities

💡 DMK Insight

Canadian rates are weakening, and here’s why that matters: the CAD’s performance is closely tied to US yields and geopolitical tensions, which could create volatility in the forex market. With employment data expected to show only a modest rebound, traders should be cautious. If CAD employment doesn’t meet expectations, we could see further depreciation against the USD. The current geopolitical climate adds another layer of uncertainty, potentially impacting risk sentiment and leading to capital flows that favor safe-haven currencies. Watch for key levels in CAD/USD; a break below recent support could trigger more selling pressure. On the flip side, if US yields start to stabilize or geopolitical tensions ease, the CAD could find some support. Keep an eye on upcoming economic indicators and central bank communications that might shift the narrative. The next few weeks are crucial for positioning, especially with volatility likely to be imported from external factors.