Loonie Gains on Oil Price Rally Amid Weak Canadian Jobs Report

The Canadian dollar is gaining traction against its US counterpart, despite a weak jobs report in Canada. The USD/CAD exchange rate has slipped by 0.15% to 1.3813 as the loonie benefits from an oil price rally that offsets the negative impact of the employment data.

Last week's Canadian jobs report showed a loss of 41,700 workers, with the unemployment rate remaining steady at 6.4%. However, the US Nonfarm Payrolls report for August crushed estimates, pushing the USD/CAD higher initially before fading.

The escalation of the US-Iran war has increased upward pressure on energy prices, which typically correlate positively with the Canadian dollar. As a result, the USD/CAD pair is expected to face further downside due to interest rate differentials between the Federal Reserve and the Bank of Canada.