06:14 AM EDT, 06/05/2026 (MT Newswires) -- Canada releases May's Labour Force Survey (LFS) at 8:30 a.m. ET on Friday, at the same time as the United States jobs report, said ING.

The narrative in Canada has been "less constructive" than in the U.S., writes the bank in a note. April's LFS figures were "poor," with unemployment jumping to 6.9% and 17,700 net job losses.

Consensus is looking at stabilization on Friday: 6.9% and 10,000 job gains. But unless markets see unemployment inch back lower, the contribution of the jobs market to the Bank of Canada policy will remain dovish, stated ING.

The USD/CAD two-year swap rate gap has widened by around 25bps to its highest level since pre-Liberation Day of April, pointed out the bank. That has underpinned the recent rally in USD/CAD, alongside the first signs of risk premium emerging around the USMCA trade deal renegotiations.

ING's view remains more dovish than markets on the BoC, which still appears to have a higher bar for hiking rates than the Federal Reserve due to domestic economic challenges and uncertainty about the USMCA.

So, while the bank's call beyond the short-term still leans US dollar (USD) bearish, ING remains less excited about the potential of the Canadian dollar (CAD or loonie) relative to other commodity currencies, such as the Australian dollar (AUD), New Zealand dollar (NZD) and Norwegian krone (NOK).

In the coming days, the risks of a test of 1.40 in USD/CAD are "non-negligible," added the bank.