USDCAD Fundamental Analysis
Bloomberg—The Canadian dollar slipped back toward 1.41 per US dollar after a short rebound from the seven-month low of 1.412 seen on November 6th. The boost from the federal budget did not last long, as the country’s economic fundamentals remain weak.
Meanwhile, BoC officials called for a broad effort to improve productivity, especially as trade pressures from the United States continue to weigh on the outlook. In addition, October’s headline inflation slowed to 2.2% year on year, making it harder to argue for tighter Bank of Canada policy.
On the commodities side, oil prices also failed to support the loonie. Crude fell after industry data showed a US inventory increase of about 4.4 million barrels, while seaborne stockpiles moved close to record levels. This removed a key external pillar for the currency.
Finally, the latest Fed minutes showed policymakers were divided, which lowered expectations for near-term rate cuts. At the same time, the delayed US jobs report surprised markets with a stronger-than-expected gain of 119,000 payrolls.