Anna 
The Canadian Dollar (CAD) experienced a notable surge on Friday following the release of robust employment data, with the Canadian economy adding significantly more jobs than analysts had anticipated. However, despite this positive economic news, the CAD’s gains are being tempered by prevailing risk-off sentiment in the market, which is propping up demand for the US Dollar (USD) amidst concerns over hawkish comments from Federal Reserve (Fed) officials and disappointing US consumer sentiment figures.
In April, Canada recorded its highest net job gains since February 2023, with nearly 100,000 new jobs added to the economy while maintaining an unemployment rate of 6.1%. Conversely, sentiment in the US remains cautious as consumers and Fed policymakers anticipate a prolonged period of elevated inflation, contrary to the expectations of investors hoping for sooner interest rate cuts.
The CAD’s upward trajectory is thus constrained by the prevailing risk aversion observed on Friday, limiting its gains in the face of otherwise positive economic indicators. The tug-of-war between economic data and market sentiment continues to influence currency movements, particularly impacting the CAD against the backdrop of broader market dynamics.
