The content from FXStreet Insights Team includes expert-driven observations along with additional insights by analysts. Note that market data is strictly for informational purposes and should not be used as recommendations for trading decisions.<\/p>\n
We see the Canadian dollar under pressure as the USD\/CAD holds firmly above the 1.4000 level. This is happening because markets are fully pricing in a Bank of Canada rate cut on October 29. Recent data supports this view, as Canada’s latest jobs report for September showed a surprising loss of 20,000 positions, pushing the unemployment rate up to 6.2%.<\/p>\n
In contrast, the US economy appears more resilient, which should keep the Federal Reserve on hold for now. The last Non-Farm Payrolls report showed a robust gain of over 250,000 jobs, while core inflation remains stubbornly above the Fed’s target at 3.4%. This growing policy divergence between a dovish BOC and a neutral Fed is the key driver for a higher USD\/CAD.<\/p>\n
For derivative traders, this outlook suggests positioning for further Canadian dollar weakness against the US dollar. Buying USD\/CAD call options with expiration dates after the October 29th meeting is a direct way to play this anticipated move. A bull call spread could also be considered to reduce the upfront premium, especially given the high certainty of the event.<\/p>\n
Weakness in energy markets is also adding to the pressure, as WTI crude prices have recently fallen below $80 a barrel, weighing on the commodity-linked Canadian dollar. This situation is reminiscent of what we saw in 2015, when a combination of BOC rate cuts and falling oil prices sent USD\/CAD surging well past 1.4500. We believe this historical pattern provides a useful guide for the coming weeks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/CAD holds above 1.4000 as markets await Bank of Canada’s survey on weak labour outlook.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-32671","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/32671","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=32671"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/32671\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=32671"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=32671"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=32671"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}