Loony continues gain against dollar

Daily Currency Update

CAD - Canadian DollarThe Canadian Loonie rallied 2.6 percent versus the US dollar last week, in line with other commodity currencies. Strong Canadian employment numbers, with May’s labor market report showing an unexpected gain also helped the CAD. The Bank of Canada (BoC) kept its rate at 0.25%, noting that market conditions have improved, and the economy appears to be avoiding worst-case scenarios.Meanwhile, the Federal Reserve’s upcoming meeting and statement take center stage this week, and with a new perspective, after Friday’s positive jobs report.The US economy added 2.5m jobs, beating expectations of 7.5m job loses, according to the Non-Farm Jobs report released last Friday. Half of these jobs were added in the restaurant and food sector as businesses rushed to open ahead of Memorial Day. Although the USD ended the week with loses against all G10 currencies, the easing restrictions on US businesses paint a rosier picture for the USD. But what does all of this mean for the USD now and the Federal Reserve? Well, the Fed is now meeting under slightly rosier circumstances, but it isn't expected to change its tone too much. If anything, it entrenches the view that negative rates aren't an option or a necessity.