Us Jobs Data Shifts
US payrolls fell by 92K in February versus expectations for a 59K rise, and January was revised to 126K from 130K. The unemployment rate increased to 4.4% from 4.3%. Average hourly earnings rose 0.4% month-on-month, above the 0.3% forecast, and annual wage growth rose to 3.8% from 3.7%. US retail sales fell 0.2% month-on-month, the control group rose 0.3%, and sales excluding autos were flat at 0%. WTI crude was up over 30% this week and traded around $88.75 per barrel, with disruption risks linked to the Strait of Hormuz. Qatar’s energy minister said oil could reach $150 per barrel if Gulf exports stopped. In Canada, the Ivey PMI rose to 56.3 from 47, and the seasonally adjusted index increased to 56.6 from 50.9.Shifting Macro Backdrop
Looking back at February 2025, we saw the Canadian dollar strengthen significantly due to a weak US jobs report and soaring oil prices from geopolitical tensions. Today, on March 6, 2026, the environment has shifted, presenting a different set of opportunities for USD/CAD. This suggests that strategies that worked last year may need to be reconsidered. The most recent US Nonfarm Payrolls report for February 2026 showed a robust gain of 225,000 jobs, handily beating expectations and lowering the unemployment rate to 3.8%. This contrasts sharply with the surprising 92,000 job loss we saw in the same month last year. This strong labor market data, combined with core inflation that remains sticky around 3.2%, keeps the pressure on the Federal Reserve to maintain its restrictive stance. On the other hand, the Canadian economy is showing signs of cooling, with the latest data from Statistics Canada indicating a small job loss in February 2026 and an unemployment rate that has ticked up to 6.2%. Furthermore, WTI crude oil prices have stabilized around $79.50 per barrel as the geopolitical risks that drove prices to nearly $90 in early 2025 have eased. This removes a key pillar of support for the loonie that was present a year ago. Given this growing divergence between the US and Canadian economic outlooks, we should consider positioning for a rise in USD/CAD. Purchasing call options on USD/CAD with expiry dates in the next 4 to 8 weeks offers a defined-risk way to profit from potential US dollar strength. This strategy would benefit from both continued strong US economic data and any further signs of weakness from Canada that might push the Bank of Canada towards a more dovish stance. Create your live VT Markets account and start trading now.
Start trading now – Click here to create your real VT Markets account
