The Canadian dollar stayed near a one-month low against the U.S. dollar on Friday. Stronger underlying U.S. producer inflation reinforced expectations of further Federal Reserve tightening, while firmer oil prices offered some support.
The Canadian dollar held near a one-month low against its U.S. counterpart on Friday. Stronger underlying U.S. producer inflation reinforced expectations of further Federal Reserve tightening, offsetting support from firmer oil prices.
The loonie traded around C$1.4260 per U.S. dollar at approximately 8:45 a.m. EST, little changed from Thursday's close of C$1.4257. It also touched a 19-month intraday low of C$1.4334 earlier in the week.
Core producer prices beat expectations
U.S. producer prices rose 0.3% in October, below economists' expectations for a 0.4% increase. However, the annual rate accelerated to 6.5% from 6.3% in September.
Core producer prices, which exclude food and energy, increased 0.5% on the month, exceeding expectations for a 0.3% gain. The stronger underlying reading could reinforce expectations that the Federal Reserve will continue tightening monetary policy, supporting the U.S. dollar against its major peers.
The U.S. dollar index has remained near its highest level since April 2025 following a three-session rally.
Canadian labour data adds pressure
Oil prices provided some support to the commodity-linked Canadian dollar. A modest recovery in crude helped limit further weakness in the currency.
However, domestic concerns continued to weigh on the loonie. Canada's unemployment rate climbed to 6.7% in October from 6.5% in September, and the economy shed 4,700 jobs.
Investors will also assess Canadian manufacturing and wholesale sales data for September, released alongside the U.S. inflation figures. The Canadian dollar remains vulnerable to further U.S. dollar strength as markets weigh persistent inflation against the possibility of additional Federal Reserve rate increases.
Source: Investing.com
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