The Canadian dollar plunged the most since June after a report showed the nation’s labor market unexpectedly contracted last month.

The currency fell as the number of employed people in Canada declined by 31,200 in July, the most since November, after posting an unexpected loss of 700 the month prior, according to data released by Statistics Canada. A Bloomberg survey of economists forecast 10,000 new hires last month. Meanwhile, data out of the U.S. showed better-than-expected job creation, renewing expectations that the Fed may tighten monetary policy this year.

“The Canadian dollar just got hit with a one-two punch with the strong U.S. jobs data and the weaker Canadian data,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

The loonie, as the Canadian dollar is nicknamed, fell 1.3 percent to C$1.3194 per U.S. dollar as of 10:38 a.m. in Toronto. The Canadian dollar is still the second-best performing currency behind the Japanese yen among its Group-of-10 peers this year.

In a separate report, Statistics Canada said the nation’s trade deficit hit records in the second quarter, including a C$3.6 billion ($2.7 billion) gap in June. The shortfall, at C$15 billion for the year so far, puts the country on pace to pass last year’s record-setting deficit even as Bank of Canada governor Stephen Poloz has emphasized an export-led revival.

“The BoC has been trying to reorient the economy and it’s been largely unsuccessful,” said Shaun Osborne, chief foreign-exchange strategist at Bank of Nova Scotia in Toronto. “The trade data underscores the challenges ahead for Canada. After the jobs headlines pass, it will weigh on the Canadian dollar going forward.”

The worsening numbers could pressure the central bank to cut interest rates, especially if oil prices slide, said Commonwealth’s Esiner. The mounting pressure comes even as Prime Minister Justin Trudeau is set to inject a large dose of stimulus to kickstart the economy, allocating billions more in infrastructure spending and middle class tax help.

Hedge funds and other large speculators were caught wrong-footed after raising their net bullish position on the Canadian dollar to 23,180 contracts as of July 26, according to data from the Commodity Futures Trading Commission, near the highest since 2013.

The Canadian dollar will weaken to C$1.32 against the greenback this year before rallying to C$1.29 by the end of 2017, according to the median of 79 forecasts in a Bloomberg survey.

Bloomberg August 5, 2016