FX.co ★ Canadian Dollar Loses Ground

The Canadian dollar weakened, nearing 1.41 against the US dollar after experiencing a short-lived recovery from its seven-month low of 1.412 on November 6th. The currency's brief surge, buoyed by budgetary factors, quickly subsided due to persistent weak fundamentals. Officials from the Bank of Canada called for a nationwide effort to enhance productivity, as trade tensions with the United States continue to pose significant risks to the Canadian economy, which is beginning to show signs of stress. In addition, October's headline inflation decreased to 2.2% year-over-year, undermining the argument for a consistently tightened monetary policy by the Bank of Canada. On the commodities front, the loonie received little support as oil prices declined. This drop followed reports indicating a roughly 4.4 million barrel increase in US crude supplies and a rise in seaborne inventories to near-record levels, thus removing a crucial external support for the Canadian currency. Meanwhile, minutes from the Federal Reserve revealed divisions among policymakers, diminishing the likelihood of imminent interest rate cuts. Furthermore, the delayed US jobs report surprised positively, showing a payroll increase of 119,000, exceeding expectations.