Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3840-1.4090
Euro 1.6130-1.6380
Sterling 1.8400-1.8650
WTI Oil (opening level) $59.14
The CAD/USD is opening at 1.3963 ( 0.7162 )
CAD remains supported by the upbeat GDP figures released on Friday. The Canadian economy bounced up with an unexpected strength in Q3, growing at a 0.6% quarterly pace, to retrace a 0.5% contraction in Q2. year-on-year, the GDP grew 2.6%, beating expectations of a 0.5% growth and following a 1.8% year-on-year decline in the previous quarter.
These figures ease pressure on the Bank of Canada to lower borrowing costs at its December 10 meeting, which has provided a fresh impulse to the Loonie.
USD, on the contrary, remains vulnerable amid growing hopes that the Fed will cut rates by 25 basis points at its next meeting, also on December 10, and also a few more times in 2026. The US Dollar Index, which measures the value of the US Dollar against a basket of currencies, is drifting lower on Monday and has reached fresh two-week lows.
In this context, the USD/CAD is unlikely to post a significant recovery.
Headlines
· President Trump said he has decided on the next Fed chair, while White House economic adviser Hassett noted he would gladly accept if chosen.
· President Trump declared the cancellation of executive orders signed by former President Biden using an autopen, claiming about 92% were signed this way and are now void. Trump alleged Biden's lack of involvement in the autopen process and threatened perjury charges if Biden denies it.
· China’s official Manufacturing PMI stayed in contraction at 49.2 (in line with expectations), while Non-Manufacturing PMI missed forecasts at 49.5 (vs. 50.0 expected).
· The yen strengthened and the 2-year JGB yield rose to its highest since 2008 after Bank of Japan Governor Kazuo Ueda gave the clearest hint yet of a rate hike on 19 December. He said he bank “will consider the pros and cons of raising the policy interest rate and make decisions as appropriate” by examining the economy, inflation and financial markets at home and abroad.
Key Points
· Equities: Wall Street ended November higher on Fed-cut hopes, Europe edged up, while Hong Kong slipped as property names weighed
· Volatility: VIX mid-teens, short-dated vols lower, calmer backdrop
· Digital assets: DeFi exploit at Yearn’s yETH pool sparks fresh crypto risk-off
· Fixed Income: Japanese bond yields rise on Ueda rate hike comments
· Currencies: Rate hike hint sends Yen higher against the dollar
· Commodities: Silver and copper surge to record on tight supply outlook