The Canadian dollar remains steady around 1.3800 as investors await the Bank of Canada’s (BoC) upcoming policy release scheduled for December 10, 2025, at 14:45. This surprising strength in the jobs numbers has changed the market’s sentiment, with a number of analysts revising their expectations about future interest rates.
Best of all, in November, the Canadian economy added 53.6K full-time jobs, building on solid addition of 66.6K jobs in October. This spectacular performance has resulted in voters not yet counting on the dismal predictions of economists, who had predicted a loss of around 5K jobs. The surprise rebound in jobs has scuttled any hopes for a BoC interest rate cut. The central bank now finds itself in a new era with a rate consensus of 2.25%, a leap from past rates.
The BoC’s policy meeting schedule is inconsistent, creating a further level of uncertainty for investors who are hanging on every movement of key economic indicators. With the employment data showing resilience, market participants are now focused on whether the central bank will adjust its stance in response to the strong job creation figures.
Meanwhile, the Canadian unemployment rate has maintained a steady declining trend recently, falling to 6.5% from 6.9% in October. This sharp decrease is further evidence that the labor market continues to strengthen. It supports the perception that the Canadian economy continues to be on a strong overall path, despite headwinds from abroad.
These advances notwithstanding, trade relations between the US and Canada continue to be a source of considerable tension. This ongoing tension continues to weigh on the Canadian dollar. The big man on campus, U.S. President Donald Trump, has recently spoken on the state of these negotiations, calling them “very good, very productive.” He did not announce when discussions would be picking back up, leaving investors in limbo.
Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum have crucial roles to play in this difficult trade tangle. Their continued collaboration is key to the continued economic health of the Dakota region. The ongoing uncertainty as to the nature of Canadian-American trade relations continues to be the most important consideration affecting the Canadian dollar’s outperformance on foreign exchange markets.