11.09.202513:52:54UTC+00Canadian Dollar Hovers at Mid-August Lows

The Canadian dollar is trading at approximately 1.385 against the US dollar, lingering close to its mid-August lows following weaker-than-expected domestic labor and inflation data. These developments have increased market expectations that the Bank of Canada might soon implement policy easing. In early September, Canada reported a job loss of about 65,500 positions in August, raising the unemployment rate to 7.1%. This is the highest level recorded outside the pandemic period since 2016, with notable employment declines in transportation, manufacturing, and professional services. While oil prices have offered some support, they have not risen enough to mitigate the impact of the labor market downturn and changes in monetary policy expectations. Concurrently, the US dollar remained subdued in the wake of softer US Consumer Price Index (CPI) data and an increase in jobless claims, which reached nearly a four-year high in early September. This situation, alongside recent downward revisions in payroll figures, has led rate futures to anticipate about 75 basis points of rate cuts from the Federal Reserve this year, suggesting an approximate reduction at each of the three remaining Federal Open Market Committee (FOMC) meetings starting next week.