Insights 
VT 
Canada’s budget announcement is under close watch, with measures expected to support the tariff-impacted economy. Fiscally expansionary actions may lessen the need for further rate cuts from the Bank of Canada.
Attention remains on economic data, particularly inflation and employment statistics. Inflation figures falling short could strengthen the case for a rate cut in 2026, while rising unemployment rates could lead to dovish sentiments.
USD CAD November Projections
The USD/CAD is projected to remain around 1.40 throughout November. A decline is anticipated in December, influenced by a projected weakening of the USD.
We should closely watch today’s Canadian budget announcement, as expansionary government spending is expected to support the economy. A bold fiscal plan could strengthen the Canadian dollar by reducing pressure on the Bank of Canada to cut interest rates. This makes the budget a key event for near-term currency direction.
For most of November, the USD/CAD exchange rate is likely to remain stable around the 1.40 level. This price has acted as a significant psychological barrier in the past, especially during the market stress of 2020, suggesting it will be difficult to break through. Options strategies that profit from low volatility could be effective in this environment.
Key Data Releases and Strategic Shifts
However, key data releases later this week could disrupt this stability, particularly Friday’s jobs report. Canada’s unemployment rate has already risen from 6.2% at the start of the year to 7.1%, and a further increase would fuel expectations for a rate cut in early 2026. We must also watch inflation data, as recent figures showing a cool-down to 2.5% are already making the case for looser monetary policy.
Looking towards December, the forecast points to a weaker US dollar, which should push the USD/CAD pair lower. This suggests we should prepare to shift from range-bound strategies to more directional bearish positions. This move could see the pair fall back towards the 1.37-1.38 range we saw earlier in the third quarter.
