ING Sees Jobless Rate Rising, CAD Lagging Ahead of Friday's Canada Jobs Data

06:46 AM EDT, 09/05/2025 (MT Newswires) -- Canada releases its August Labour Force Survey on Friday at 8:30 a.m. ET, the same time as the US, ING said.

Economists expect a 5,000 rise in employment after a 40,000 contraction in July, the bank said. Given payroll volatility, ING said the focus is the unemployment rate, already above 2018-2019 levels at 6.9%, which is expected to climb to 7.0%, with risks skewed higher.

Markets have shifted expectations for the next Bank of Canada rate cut to October, but ING thinks the probability of a September move (about 15 basis points) is underpriced and says a soft print could trigger a dovish rerating.

Inflation slowed further below target to 1.7% year over year in July, and core measures remain at a tolerable 3.0%.

ING continues to expect the Canadian dollar (CAD or loonie) to lag G10 peers, though US dollar (USD) weakness should keep USD/CAD capped near the 1.38 area.

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