Canadian Dollar Appreciates After Strong Q3 GDP

2025-11-28 14:13 By Felipe Alarcon 1 min. read

The Canadian dollar strengthened past 1.40 per US dollar to one-month highs as a stronger-than-expected Q3 GDP print coincided with a softer US dollar on growing odds of Fed easing.

Q3 GDP rose 0.6% quarter on quarter, annualized at 2.6%, reversing the prior quarter’s contraction driven by a smaller import bill down 2.2% and a slight rise in exports up 0.2%, a trade-led improvement that brightens the current account outlook.

Higher government capital spending up 2.9%, including an 82% jump in weapon-systems outlays, supported domestic demand even as household consumption edged down 0.1%.

The Bank of Canada’s pause with the policy rate at 2.25% preserves an interest-rate cushion that sustains carry-oriented inflows into CAD, while markets now price roughly an 80% chance of a 25 bp Fed cut in December which weakens the dollar and removes a major headwind for the loonie.



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