USD/CAD surges to its highest level this month around 1.3900 as risk aversion dominates the markets
US Dollar Strengthens Against Canadian Dollar
On Thursday, the US Dollar continued its upward momentum against the Canadian Dollar, marking its fifth straight day of gains and reaching its highest level in four weeks at 1.3888. The Greenback benefited from a cautious market sentiment, while the Canadian Dollar faced pressure due to declining oil prices.
Although WTI crude oil prices, a key Canadian export, have rebounded slightly from Wednesday’s lows, they remain about 1% lower for the week. US President Donald Trump’s announcement that Venezuela will supply 30 to 50 million barrels of oil to the US has raised concerns about a potential oversupply, especially as global economic growth shows signs of slowing.
Recent US economic indicators have painted a mixed picture. While Wednesday’s employment figures pointed to a stagnant job market, the services sector reported stronger-than-expected growth, suggesting robust economic activity in the final quarter of 2025.
Market Outlook Ahead of Key Reports
Despite the US Dollar’s recent strength, investors are cautious about making significant moves before Friday’s Nonfarm Payrolls release. This report is expected to play a crucial role in shaping expectations for the Federal Reserve’s future monetary policy decisions.
Canadian Economic Updates
In Canada, economic data has been limited this week. Thursday’s International Merchandise Trade report may offer some direction for the Loonie, but the main focus will be on December’s employment data, set for release on Friday. Forecasts suggest a decline in net jobs and a possible uptick in the unemployment rate, indicating potential downside risks for the Canadian Dollar.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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