USD/CAD is under pressure near 1.3940 as markets await Canada’s November labor force survey, with modest job losses expected. The Bank of Canada (BOC) is likely to cut interest rates, while the upcoming USMCA talks remain a potential downside risk to the Canadian economy, according to BBH FX analysts.
BOC suspended amid weak employment outlook
“USD/CAD is trading heavily near 1.3940. Canada’s November Labor Force Survey will be released next (1:30 PM in London, 8:30 AM in New York). The economy is expected to lose -2.5K jobs in November after surprising with strong gains of 66.6K and 60.4K in October and September respectively. Q3 Business Expectations Survey indicates declining hiring intentions over the next 12 months.”
“As long as labor weakness does not deepen or widen, the Bank of Canada (BOC) is done cutting. The swap market means fixed interest rates at 2.25% over the next 12 months and a 25 basis point rise to 2.50% in the next two years. USD/CAD needs to sustain a break below its 200-day moving average (1.3913) to gain downside momentum.”
“The upcoming review of the United States-Mexico-Canada Trade Agreement (USMCA) is an ongoing source of uncertainty and downside risk to the Canadian economy. Businesses and consumers may be cautious as they wait for more clarity on the future of the USMCA. The first six-year joint review of the USMCA is scheduled for July 1, 2026.”
