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Canadian Dollar struggles as US Dollar hits six-month high on trade optimism

  • The Canadian Dollar remains under pressure despite stronger-than-expected job creation in September.
  • The US Dollar gains traction, helped by a softer tone from Washington toward Beijing.
  • Oil prices rebound, but trade tensions and the ongoing US government shutdown keep volatility high.

USD/CAD strengthens on Monday, up 0.20% for the day, around 1.4034 at the time of writing, its highest level since April 10. The move comes as investors digest the stronger Canadian employment figures released on Friday, which tempered expectations of another interest rate cut by the Bank of Canada (BoC) in October.

According to Statistics Canada, the Unemployment Rate remained steady at 7.1% in September, better than the 7.2% forecast, while the economy added 60.4K jobs, far exceeding the expected 5K and contrasting with the 65.5K jobs lost in August. These gains, driven by full-time employment, point to resilience in the labor market. As Commerzbank noted, this performance “makes another rate cut at the end of the month somewhat less likely,” though the bank also warned that Canadian labor data have been particularly volatile in recent months.

The rebound in Oil prices is offering limited support to the Loonie, but momentum remains fragile. As Canada is the largest Oil exporter to the United States, higher Crude Oil prices typically support the Canadian Dollar (CAD). However, concerns about slowing global demand continue to cap the currency’s upside.

On the US side, the US Dollar (USD) regained some stability after US President Donald Trump said trade relations with China “will all be fine,” hinting at a possible de-escalation following his announcement of 100% tariffs on Chinese imports from November 1. This shift in tone helped the US Dollar Index (DXY) recover above 99.00 after a sharp decline on Friday.

Nevertheless, the broader outlook remains uncertain. The US government shutdown has now entered its third week, while the Federal Reserve (Fed) stays on track for further monetary easing. Markets currently price in a near 95% chance of a rate cut at the Fed’s October meeting and another in December, according to the CME FedWatch tool. These expectations continue to weigh on US Treasury yields and may limit the US Dollar’s upside in the near term.

Canadian Dollar Price Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Euro.

USDEURGBPJPYCADAUDNZDCHF
USD0.38%0.13%0.21%0.26%-0.20%0.13%0.33%
EUR-0.38%-0.25%-0.11%-0.13%-0.49%-0.25%-0.07%
GBP-0.13%0.25%0.16%0.12%-0.25%0.00%0.16%
JPY-0.21%0.11%-0.16%-0.01%-0.46%-0.05%0.06%
CAD-0.26%0.13%-0.12%0.00%-0.50%-0.12%0.04%
AUD0.20%0.49%0.25%0.46%0.50%0.26%0.43%
NZD-0.13%0.25%-0.00%0.05%0.12%-0.26%0.15%
CHF-0.33%0.07%-0.16%-0.06%-0.04%-0.43%-0.15%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

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