Canadian Dollar Weakens on Soft Jobs Data
The Canadian dollar weakened to near 1.41 per USD in November following weaker-than-expected domestic jobs data and stronger US employment figures. Canadian employment fell by 4,700 in October, improving from September’s 68,300 decline but missing forecasts for a 13,600 increase. Private-sector employment dropped by 53,000 (-0.4%), its first decline since February. A softer labor market could prompt the BoC to cut rates to support economic activity and encourage hiring, reducing the appeal of Canadian assets. However, Canada’s GDP grew 0.8% in Q2 2026, following a 0.1% expansion in Q1. Meanwhile, US nonfarm payrolls increased by 165,000, beating expectations and reinforcing prospects for a wider US-Canada interest-rate differential, supporting the greenback against the loonie. At its latest meeting, the BoC raised rates by 25 bps to 2.5%, its first hike since 2023. Annual inflation reached 3.1% in September, below forecasts of 3.2%.
The Canadian dollar weakened to near 1.41 per USD in November following weaker-than-expected domestic jobs data and stronger US employment figures. Canadian employment fell by 4,700 in October, improving from September’s 68,300 decline but missing forecasts for a 13,600 increase. Private-sector employment dropped by 53,000 (-0.4%), its first decline since February. A softer labor market could prompt the BoC to cut rates to support economic activity and encourage hiring, reducing the appeal of Canadian assets.
However, Canada’s GDP grew 0.8% in Q2 2026, following a 0.1% expansion in Q1. Meanwhile, US nonfarm payrolls increased by 165,000, beating expectations and reinforcing prospects for a wider US-Canada interest-rate differential, supporting the greenback against the loonie. At its latest meeting, the BoC raised rates by 25 bps to 2.5%, its first hike since 2023. Annual inflation reached 3.1% in September, below forecasts of 3.2%.