It was a volatile week for the Canadian dollar. The big move came Friday morning when Canada reported surprisingly strong employment data for September, which helped the currency recover part of its recent losses. Still, the USD/CAD exchange rate remains under pressure from global risk sentiment, interest rate expectations, and weaker commodity prices.
Global markets are wrapping up the week on a surprisingly positive note, with equity indices in Asia and Europe showing resilience and North America extending gains thanks to AI-tech momentum. But for currency watchers, the story is less about today’s moves and more about what lies ahead. The Canadian dollar, in particular, is hovering near four-month lows against the U.S. dollar, and the outlook hinges on central bank decisions, oil prices, and geopolitical risks that could shape trading into next week.
The Canadian dollar (CAD) is feeling the heat. Over the past two weeks, the loonie has slipped to a four-month low near 1.3940 per USD, posted its biggest weekly loss since February at 1.1%, and only managed a small rebound as exporters locked in favorable rates. Behind the moves is a mix of weak Canadian data, falling oil prices, and a strong U.S. dollar.
September’s S&P Global Manufacturing PMI came in at 47.7, well below the 50 threshold that signals expansion, showing that the slowdown in Canada’s economy is deepening. At the same time, crude oil — one of Canada’s most important exports — has been sliding, undercutting demand for the loonie. Meanwhile, U.S. yields remain firm and American economic data continues to outperform, drawing investors into the greenback and leaving CAD on the defensive.
The Canadian dollar is looking wobbly lately. While other G10 currencies are putting up a fight against the U.S. dollar, the loonie is slouched in the corner and clearly gasping for air.
Overall, USD/CAD has been grinding higher for some time now, and it’s now circling the 1.3890 level — a fresh monthly high. That’s the kind of number that makes anyone with U.S. travel plans or cross-border payments cringe.
