Canadian Dollar Hits 4-week Low

The Canadian Dollar touched 1.42 against the USD, the lowest since October 2026. Over the past 4 weeks, US Dollar Canadian Dollar lost 0.3%, and in the last 12 months, it increased 1.66%.

The Canadian dollar weakened to around 1.42 per USD in November, nearing a one month low amid prospects of a wider US-Canada interest-rate differential. Hotter-than-expected US inflation data in October reinforced expectations of further Federal Reserve rate hikes, supporting the greenback against the loonie on prospects of carry trade into the US. Meanwhile, most market participants are also pricing in a Bank of Canada rate hike due to high inflation. In Canada, annual inflation rose to 3.1% in September from 3.0% in August, its highest level since May’s 3.2%. The increasing prices follow up on a recovering economy with Q2 GDP growth soaring to 0.8%, while the Democratic Party victory in US mid-term elections could soften trade pressures on Canadian growth. Limiting the hawkish certainty, employment fell by 4,700 in October, missing expectations for a 13,600 increase. At its latest meeting, the BoC raised rates by 25 bps to 2.5%, its first hike since 2023.

The Canadian dollar weakened to near 1.41 per USD in November following weaker-than-expected domestic jobs data and stronger US employment figures. Canadian employment fell by 4,700 in October, improving from September’s 68,300 decline but missing forecasts for a 13,600 increase. Private-sector employment dropped by 53,000 (-0.4%), its first decline since February. A softer labor market could prompt the BoC to cut rates to support economic activity and encourage hiring, reducing the appeal of Canadian assets. However, Canada’s GDP grew 0.8% in Q2 2026, following a 0.1% expansion in Q1. Meanwhile, US nonfarm payrolls increased by 165,000, beating expectations and reinforcing prospects for a wider US-Canada interest-rate differential, supporting the greenback against the loonie. At its latest meeting, the BoC raised rates by 25 bps to 2.5%, its first hike since 2023. Annual inflation reached 3.1% in September, below forecasts of 3.2%.