Loonie Rally Looks Hard to Sustain Amid Cooling Labor Market

The Canadian dollar's recent bounce from C$1.42 to C$1.40 per US$ may not be sustainable, according to Rosenberg Research.

The firm points out that Canada's latest labor numbers still show a cooling market, despite the strong headline jobs reading of 88,000 gain in May.

Rosenberg Research highlights a 2.8% job-vacancy rate, which is below the historical average of 3.4%, and softer pay, with salaried workers' average hourly earnings falling 0.4% from April to May.

This mix of data can affect what traders think the Bank of Canada will do next, as a lower path for Canadian interest rates can shrink Canada's yield advantage over the US and make a loonie rally harder to sustain.