Crédit Agricole: Weak Economy Weighs on Canadian Dollar; Jobs Data May Set Next Direction

According to Jin10, a Crédit Agricole research report said the U.S. dollar against the Canadian dollar stabilized near 1.40 over the past week. The Democrats’ decisive victory in the U.S. midterm elections did not noticeably lift the Canadian dollar, and positive signs of renewed U.S.-Canada trade talks also failed to change the picture. Canada’s preliminary third-quarter GDP data showed growth slowing to 1.3%, below the Bank of Canada’s 2% expectation, with economic weakness continuing to weigh on the currency. The bank said attention had shifted to October’s employment report. Earlier weak employment data had raised concerns that Canada’s labor market would struggle to withstand U.S.-Canada trade tensions. Signs of a labor-market recovery could support the Canadian dollar. However, a decisive break by the U.S. dollar-Canadian dollar pair below the 200-day moving average near 1.39 would require a stronger positive catalyst.