FX.co ★ Canadian Dollar Steady

The Canadian dollar remained stable near 1.392 against the US dollar today. This was due to a slightly weaker US dollar and stronger domestic economic activity, which mitigated immediate downward pressure on the Canadian currency, though declining oil prices limited further gains. The US dollar is somewhat soft, with the DXY index trading in the upper 97s. This reduced demand for safe-haven currencies, providing an opportunity for currencies like the Canadian dollar to rebound. Moreover, financial markets are anticipating approximately a 25 basis points interest rate cut by the Federal Reserve in October, with a high likelihood of an additional move in December, maintaining overall pressure on the US dollar. Canadian economic data has been positive, helping to stabilize concerns. July's GDP was revised to show a 0.2% monthly increase, and August's economic activity was largely unchanged, alleviating fears of a downturn in Canadian growth. However, this support is being challenged by falling oil prices following OPEC+ signaling increased production and Iraq resuming pipeline flows, diminishing Canada's advantage from commodities and limiting potential appreciation for the loonie.