Canadian Dollar Tests September Highs

2025-12-22 14:05 By Felipe Alarcon 1 min. read

The Canadian dollar strengthened toward 1.375 per US dollar, testing its highest levels since September as Canada’s monetary and yield backdrop became relatively more supportive while the US dollar softened on mixed US data.

Domestic signals remain mixed, with retail sales falling 0.2% in October but a preliminary rebound reported for November, allowing the BoC to justify a policy pause rather than an immediate cut.

Inflation data reinforced that view, with headline CPI steady at 2.2% and the trimmed mean easing to a ten month low of 2.8%, strengthening confidence that price pressures are converging toward target.

The Bank’s decision to hold rates at 2.25% and its assessment that policy is about the right level further tempered expectations for aggressive near term easing.

In parallel, the US dollar softened as delayed labor and consumption data pointed to a cooling economy, with unemployment rising to 4.6% and retail sales stalling, narrowing relative policy support for the greenback.



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