Canadian Dollar Falls to 19-Month Low After Labor Data

The Canadian dollar weakened toward 1.43 per US dollar in October, the lowest in 19 months, as week labor data strengthened bets that the Bank of Canada will refrain from delivering a rate hike. Employment fell by 68,300, missing expectations for a 7,000 increase, while the unemployment rate edged up 0.1 percentage point to 6.5%. Recent data also pointed to a cooling economy. Real GDP rose 0.2% in August, as gains in mining and quarrying and retail trade partly offset a decline in oil and gas extraction. GDP was essentially unchanged in July, ending a three-month growth streak. Although August’s result matched expectations, it highlighted a weaker start to the third quarter. Meanwhile, uncertainty over US-Canada trade ties persisted after US President Donald Trump said Canada had been difficult to deal with, casting doubt over the prospects for a new trade deal.

The Canadian dollar weakened slightly to around 1.42 per US dollar in October, its lowest level in about 12 weeks, as stalled domestic growth and US dollar strength kept the loonie under pressure. Advance estimates showed real GDP increased 0.2% in August, with gains in mining and quarrying and retail trade partly offset by a decline in oil and gas extraction. GDP was essentially unchanged in July, ending a three-month run of growth. The result was in line with expectations but highlighted a weaker start to the third quarter. Soft GDP reinforced expectations for the Bank of Canada to hold rates. The US ban on various Canadian goods imports also took effect. Meanwhile, the US dollar climbed against a basket of major currencies as markets increased bets on further Federal Reserve rate increases. Expectations for a widening US-Canada interest-rate differential are reinforcing the greenback’s advantage over the loonie.

The Canadian Dollar touched 1.42 against the USD, the lowest since April 2025. Over the past 4 weeks, US Dollar Canadian Dollar gained 2.93%, and in the last 12 months, it increased 2.01%.