The Canadian dollar is lower Monday morning against the US Dollar after touching a 2-month high on Friday following the release of better-than-expected November jobs data. The weakening of the Canadian dollar appears to be based on a broad, risk-averse investor sentiment this morning after reports that a U.S. destroyer and three commercial ships operating in the Red Sea came under attack yesterday.
Investors are also feeling nervous about several key economic data releases expected this week. On Wednesday, the Bank of Canada is expected to hold steady, but the bank’s accompanying statement will be analyzed very closely for clues about the bank’s next move. On Friday, the U.S. November payrolls report will be released. This will be the latest data that needs to dance to the tune of investors and the Fed. Meaning, it will have to be robust enough to show that a soft landing is in view without being too strong to trigger another rate hike.
Interest rates continue to be the key driver of the USD/CAD pairing and expect any news that impacts or clarifies interest rate moves by the BoC or the Fed to impact the Canadian dollar’s price versus the US dollar.
The Canadian dollar is currently trading at 1.3538 CAD against the US Dollar.
