Canadian Dollar Loses Ground After GDP Data

2025-10-31 13:36 By Felipe Alarcon 1 min. read

The Canadian dollar slipped past C$1.40 per US dollar after a surprisingly weak GDP report pushed markets to price a higher probability of another Bank of Canada rate cut while a firmer US dollar compounded the pressure.

Canadian GDP is expected to rise 0.1% monthly in September, while August was revised to a 0.3% monthly contraction, the largest monthly drop since December 2022.

That downgrade reflects a stronger response to trade frictions with the United States and the drag from higher BoC policy rates.

Markets had largely treated the BoC’s recent cut as priced in and refocused on the Bank’s data dependent guidance as new weakness accumulated, even though inflation remains elevated with headline CPI near 2.4% y/y and the Bank’s trimmed measure close to 3.1%.

Meanwhile the US dollar found support after the Fed’s widely anticipated 25bp cut as Chair Powell warned a further move in December is not guaranteed.



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