FX.co ★ Canadian Dollar Rebounds from 7-Month High

The Canadian dollar strengthened to approximately 1.405 against the USD, recovering from its seven-month peak of 1.412 reached on November 6th. This appreciation was driven by a series of encouraging labor market indicators. Notably, the unemployment rate decreased to 6.9% in October, down from a four-year high of 7.1% recorded in the previous month, bolstered by an unexpected rise in employment and a reduction in unemployment figures. Furthermore, wage growth surged to an eight-month high of 4%, surpassing the most recent inflation indicators. These developments have reinforced the belief that the Bank of Canada may have concluded its rate-cutting cycle in its most recent meeting, as indicated by policymakers, assuming their baseline projections remain stable. The Canadian economy has shown resilience against U.S. tariffs, and underlying inflation measures continue to exceed the target levels. Recent data revealed that the trimmed-mean core inflation rate, which is the BoC's preferred measure of underlying inflation, climbed to its highest point since February 2024. In contrast, the release of disappointing U.S. labor market data contributed to the weakening of the U.S. dollar.