Canadian Dollar Drops to 12-Day Low as Oil Slips and US Jobs Data Delay Dampens Fed Rate Cut Hopes

Highlights:

• The Canadian dollar slipped 0.5% to 1.4060 per US$1, hitting its weakest level since November 7 at the time of writing, as falling oil prices and delayed US job data pressured the currency.
• Oil — Canada’s key export — dropped 2.1% to US$59.44 a barrel, while the postponement of the US October jobs report reduced expectations of a December Fed rate cut.
• Canadian bond yields traded mixed, and the Bank of Canada is also expected to hold rates steady next month, adding to the cautious economic backdrop.

Currency Under Pressure

The Canadian dollar weakened to a 12-day low against the U.S. dollar, trading around C$1.4060 per US$1 (equivalent to approx. US 71.12 cents) at the time of writing. This 0.5 % drop marks its steepest single-day decline since early July.

Trigger: Oil and Jobs Data Delay

The fall comes as oil—a major Canadian export—settled about 2.1% lower, trading near US$59.44 a barrel. Simultaneously, the U.S. Bureau of Labor Statistics announced it will combine October’s non-farm payrolls with November’s report, delaying a key employment reading until 16 December, which is after the Federal Reserve’s policy meeting on 9-10 December. That delay has reduced market expectations of a US rate cut next month, boosting the US dollar and weighing on the loonie.

Impact on Rates, Economy & Outlook

With the US dollar gaining, the loonie’s decline reflects broader shifts in interest-rate expectations and commodity strength. Analysts note that unless upcoming data show a sharp downturn, the likelihood of a Fed rate cut at the December meeting is “effectively zero”.

Why It Matters

The Canadian dollar is closely linked to commodity prices—especially oil—so a slump in energy markets hits the currency hard. At the same time, rate divergence between the US and Canada can shift investor flows. With the loonie weakening, Canadian import costs may rise and inflation could face upward pressure, complicating the Bank of Canada’s outlook.

What to Watch:

• Upcoming US employment data for signs of labour-market weakness or strength
• Oil price movements and global supply-demand signals
• Canadian economic indicators such as inflation, GDP and trade figures

In short: as oil slides and US rate-cut hopes fade, the loonie is caught in a challenging global and domestic backdrop—one that could keep it under pressure unless there’s a meaningful reversal in either commodity prices or policy expectations.

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