Canadian Dollar Weakens to 7-Month Lows

2025-11-05 16:22 By Felipe Alarcon 1 min. read

The Canadian dollar slipped toward C$1.41 per US dollar, a near seven-month low, as a stronger US dollar compounded with trade uncertainties and a soaring deficit amid weaker economic growth.

A firmer US dollar eroded the carry case for the loonie after the Bank of Canada cut its policy rate to 2.25%.

The BoC’s easing trimmed domestic nominal yields even as officials signalled the cycle may be over, leaving markets focused on slowing activity rather than further policy loosening.

Ottawa’s new budget would more than double the deficit to roughly C$78.3 billion this year, a material fiscal loosening that markets must price alongside subdued growth.

Meanwhile, Oil offers little offset because prices have cooled in the low to mid sixties per barrel, which weakens Canada’s terms of trade and trims export revenue that would otherwise support the currency.

Renewed trade tensions with the United States have kept policy and growth risks elevated.



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