The Canadian dollar weakened slightly to around 1.43 per US dollar in October, extending its decline to a 12‑week low as soft labour market data reinforced expectations that the Bank of Canada will keep interest rates on hold. Employment fell by 68,000, sharply missing forecasts for a 7,000 gain, while the jobless rate edged up 0.1 percentage point to 6.5%, in line with expectations.
Additional indicators also signalled a cooling economy. Real GDP grew 0.2% in August, with gains in mining and quarrying and retail trade partly offsetting a contraction in oil and gas extraction. In July, GDP was essentially flat, halting a three‑month stretch of growth. While the August figure matched consensus estimates, it underscored a softer start to the third quarter.
At the same time, uncertainty surrounding US‑Canada trade relations persisted after US President Donald Trump characterized Canada as difficult to negotiate with, casting further doubt on the prospects for a new trade agreement.
