Forex News

• USD/CAD extends its decline for a fourth straight day as Canada’s Q3 GDP rebound supports the Loonie.
• Markets expect the BoC to hold rates in December, while the Fed is seen leaning toward a 25 bps cut next month.
• Widening policy divergence keeps the US Dollar under pressure, maintaining a bearish bias for USD/CAD.

The Canadian Dollar (CAD) strengthens against the US Dollar (USD) on Friday as traders respond to Canada’s Q3 Gross Domestic Product (GDP) rebound. At the time of writing, USD/CAD is trading around 1.3984, extending losses for a fourth consecutive day as broad Greenback weakness keeps the pair under sustained downside pressure.

Statistics Canada reported that the economy expanded modestly in Q3, with September GDP rising 0.2% MoM, in line with expectations, after August was revised to -0.1% from -0.3%. Real GDP increased 0.6% in the third quarter, reversing the previous quarter’s -0.5% contraction, while the annualized growth rate accelerated to 2.6%, well above the 0.5% consensus and a sharp improvement from -1.8% in Q2.

The details of the report showed that Canada’s Q3 rebound was driven mainly by trade, with exports rising 0.2% while imports fell 2.2%, providing a strong positive lift to growth. Domestic demand weakened as household consumption declined, as vehicle purchases fell 2.3%, and government spending dropped 0.4%.

Looking ahead, the GDP figures are unlikely to significantly alter expectations for the Bank of Canada’s (BoC) December 10 interest rate decision. At its October meeting, the BoC cut its policy rate by 25 bps to 2.25% and signaled that this move could mark the end of the easing cycle, noting that the current level is “about right” as long as inflation and economic activity evolve in line with its projections.

In contrast, traders are increasingly pricing in a Federal Reserve (Fed) rate cut next month, following dovish-leaning remarks from key policymakers earlier in the week. According to the CME FedWatch Tool, markets are now assigning roughly an 85% probability to a 25 bps rate cut at the December 9-10 meeting.

Overall, with the BoC expected to hold rates steady in December while the Fed appears poised to ease, the US Dollar is likely to stay on the back foot, keeping the broader tone for USD/CAD tilted lower.

• The Australian Dollar remains firm as hotter inflation continues to push back expectations of rapid RBA easing.
• Australian private sector credit beats forecasts, reinforcing the prospect of a vigilant Reserve Bank of Australia.
• The US Dollar stays under pressure as markets price in additional Federal Reserve rate cuts in the coming years.

AUD/USD trades around 0.6535 on Friday at the time of writing, virtually unchanged on the day. Despite several attempts to extend its recent rebound, the Australian Dollar (AUD) struggles to maintain upward momentum, even as stronger-than-expected inflation continues to delay expectations of Reserve Bank of Australia (RBA) easing and revives the risk of another rate hike.

The AUD benefited earlier in the week from hotter inflation data showing consumer prices rising for a fourth consecutive month and now sitting above the RBA’s 2%-3% target band. Markets still expect the central bank to leave the Official Cash Rate (OCR) unchanged at 3.6% in December, but the risk of additional tightening remains elevated given persistent price pressures. RBA officials stress that, while the labor market is moderating slightly, it remains fundamentally solid, keeping upward pressure on inflation.

The cautious policy tone is reinforced by Friday’s data. According to the Reserve Bank of Australia, Private Sector Credit rose 0.7% MoM in October, beating expectations of 0.6% and lifting annual growth to 7.3%, signaling still-resilient domestic demand.

At the same time, AUD/USD draws moderate support from a softer US Dollar (USD). The Greenback lacks clear direction as markets increasingly price in Federal Reserve (Fed) rate cuts starting in December. Traders now anticipate three additional rate reductions by 2026, following reports that Kevin Hassett, the White House National Economic Council Director, is the leading candidate for the next Fed chair, a profile seen as aligned with US President Donald Trump’s preference for lower interest rates.

Against this backdrop, AUD/USD remains driven by a delicate balance between Australia’s resilient economic momentum, persistent inflation, and mounting expectations of US monetary easing. For now, the pair holds steady around 0.6535, as markets wait for the next signals from both the Fed and the RBA.

The Copper price has risen above the $11,000 per ton mark again this week. The increase was fueled by various statements made during a Copper industry conference in Shanghai, Commerzbank's FX analyst Volkmar Baur notes.

US tariff uncertainty fuels COMEX stockpiling

"The chair of a metals and mining research firm cautioned that Copper prices in the US may continue to trade at a premium due to uncertainty surrounding US tariffs, which would likely lead to further stockpiling at the COMEX and a depletion of stocks outside the US. Additionally, there are concerns about raw material shortages, with the firm estimating that the Copper concentrate market will be undersupplied by roughly 500,000 tons next year."

"Furthermore, a representative of a Canadian mining company pointed out that global smelter utilization rates have fallen to a record-low of 75% due to the raw material shortage. This rate could decline even further if supply conditions don't improve. Despite these warnings and gloomy reports, the latest data shows little evidence of a slowdown in Copper production."

"As we've noted on multiple occasions, China has maintained high levels of metal production. However, plans to build new smelting capacities of 2 million tons have reportedly been suspended, according to an official from China's Nonferrous Metal Industry Association at the conference. Additionally, available LME stocks have increased recently, rising by approximately 100,000 tons from their June lows to the highest level in nearly nine months. Consequently, we see limited short-term upside potential for Copper prices."

Platinum climbed to $1,650 this week as China launched physically settled futures and options, increasing transparency and attracting industrial, jewelry, and investor participation, Commerzbank's commodity analyst Carsten Fritsch notes.

China launches physically settled Platinum and Palladium futures

"The Platinum price rose significantly this week. Yesterday, it reached its highest level in over a month at $1,650 per troy ounce. In addition to expectations of interest rate cuts, news from China was also responsible for this. Trading in Platinum and Palladium futures contracts began yesterday on the Guangzhou Futures Exchange. These are physically settled, which is likely to generate corresponding demand for Platinum and Palladium."

"The exchange will publish daily data on the stocks stored in its warehouses, which should significantly increase transparency. The futures contracts, denominated in local currency (RMB), offer buyers in China the opportunity to hedge against price fluctuations. The World Platinum Investment Council expects the futures contracts to be of great interest to end users in the industry and the automotive sector due to the possibility of physical delivery of Platinum and Palladium in powder form as well as bars and ingots."

"The futures contracts are also likely to be of interest to the jewelry industry for hedging purposes and to investors seeking to participate in market developments in China. In addition to trading in futures contracts, trading in options on both Platinum metals will also commence today on the aforementioned exchange."

The Silver price rose from $50 to more than $54 per troy ounce since the beginning of the week. The rise in the price of Silver thus eclipsed that of Gold. The Gold/Silver ratio subsequently fell to an annual low of just over 77, Commerzbank's commodity analyst Carsten Fritsch notes.

Shanghai Silver inventories drop to 10-year low

"The Silver price is being buoyed by expectations of an interest rate cut by the US Federal Reserve in the week after next. In addition, Silver inventories registered on the Shanghai Futures Exchange have fallen to their lowest level in 10 years, and those on the Shanghai Gold Exchange to their lowest level in more than nine years, according to Bloomberg, citing data from exchanges and brokers."

"This was triggered by China's record exports of 660 tons in October. These apparently went to London, where shortages had occurred in October. If deliveries were to return to China in the near future, supply outside China would become correspondingly tighter. The Silver ETFs tracked by Bloomberg recorded inflows of a good 290 tons in recent days, which withdrew supply from the market and is also likely to have contributed to the price increase."

"Since the beginning of the year, ETF inflows have totaled more than 3,500 tons, with most of this occurring in the first nine months of the year. ETF demand has thus also been a significant price driver for Silver this year."

China’s appetite for Gold is slowing as imports fall to seven-month lows, while exports to Hong Kong surge, pushing net imports 45% below last year’s level, Commerzbank's commodity analyst Carsten Fritsch notes.

Swiss exports to China drop over 90% in October

"The rise in the price of Gold to a record high in October has visibly slowed demand for Gold in China. A week ago, Swiss Gold exports showed a slump of more than 90% in deliveries to China in October."

"Data published this week by the Hong Kong Statistics Department also showed a noticeable decline in China's Gold imports. According to this data, net imports amounted to only 8 tons last month. This was the lowest level since March, when China exported even more Gold to Hong Kong than it imported from there."

"Gross imports fell to a seven-month low of 30 tons, while exports rose to 22 tons, a seven-month high. After 10 months, China's net imports from Hong Kong are 45% below the previous year's level, with the decline mainly attributable to a sharp increase in exports, which rose by a good 160% year-on-year, while imports recorded only a slight decline of 6%."

There have been numerous indications recently that refineries in India would purchase less Russian Oil due to US sanctions. However, this is not yet reflected in the figures. On the contrary, India's Oil imports from Russia are likely to reach a five-month high of 1.86 million barrels per day in November, according to preliminary data from Kpler, Commerzbank's commodity analyst Carsten Fritsch notes.

US sanctions expected to slash India’s Russian Oil purchases in December

"This is probably due to front-loading of purchases before the US sanctions against the two largest Russian Oil companies came into force on November 21. A sharp decline in Oil deliveries from Russia is therefore expected in December. Trading and refinery sources assume that these are likely to fall to their lowest level in at least three years in December. According to a source quoted by Reuters, imports are likely to be only 600-650 thousand barrels per day in the coming month."

"Russia apparently hopes to compensate for India's lower purchase volumes with higher deliveries to China. During a visit to Beijing, Russian Deputy Prime Minister Novak spoke of the possibility of higher Oil exports via pipelines and by sea. However, some Chinese refineries have also announced that they intend to buy less Russian Oil due to US sanctions."

"A peace agreement in Ukraine and the accompanied lifting of US sanctions would bring significant relief for Russian Oil exports. Oil prices therefore recently reacted with losses as soon as an end to the war in Ukraine was considered more likely."

Silver is approaching its record high, with Gold also rising, as markets price in further interest rate cuts and declining inventories in China boost momentum, Commerzbank's commodity analyst Barbara Lambrecht notes.

Silver nears all-time high amid rate-cut optimism

"Precious metal prices have also risen recently, driven by significantly increased expectations for interest rate cuts. While Gold remains more than $200 — or roughly 5% — below its record high, Silver is already within striking distance: At close to $54 per ounce, it is nearly back to its all-time high from mid-October."

"The Gold/Silver ratio has fallen to a new yearly low as a result. In the short term, a further price increase cannot be ruled out if registered Silver inventories in China continue to decline. Furthermore, Silver could continue to advance on Gold’s momentum if optimism over lower interest rates intensifies further."

The Canadian Dollar (CAD) is soft, down a marginal 0.1% against the US Dollar (USD) as it performs relatively well against all of the G10 currencies with the exception of Japanese Yen (JPY), Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Outlook for the BoC remains neutral

"The CAD is ending the week with a 0.5% gain, supported by fundamentals and an outlook for relative central bank policy that has delivered a narrowing in interest rate differentials as a result of renewed expectations for Fed easing. The outlook for the BoC remains neutral, with short-term rates markets pricing little in terms of policy changes through October 2026."

"Markets have offered little reaction to this week’s unveiling of a federal energy plan with Alberta, and may be balancing the announcement against the imposition of new tariffs on a range of steel products. Our FV estimate for USD/CAD is currently at 1.3915, softening modestly within its recent range."

"Recent price action has confirmed the importance of resistance around 1.4100 and the latest pullback has shifted our attention to near-term downside risk with a focus on the 50 day MA at 1.4005. The RSI has relinquished its modestly bullish bias and has returned to the neutral threshold at 50, opening up the possibility of a push into bearish territory. We are neutral, absent a break below the 50 day MA, and look to a near-term range bound between 1.3980 and 1.4080."

At the semi-annual OPEC+ meeting, the focus is expected to be more on details rather than a change in the short-term production strategy. Oil prices are unlikely to be significantly affected by this. Peace talks remain the key focus, Commerzbank's commodity analyst Barbara Lambrecht notes.

OPEC+ aims to remain strong as an alliance

"Hopes for an end to the war in Ukraine have put pressure on oil prices: A ceasefire would likely stop mutual attacks on energy infrastructure, and sanctions might be eased or even lifted. However, it seems unlikely that the parties will quickly agree on a peace plan. As a result, Brent crude oil prices have stabilized in the middle of their trading range between USD 60 and 65 per barrel, which has been in place since early October."

"Sunday's semi-annual OPEC+ meeting is also unlikely to deliver any major new drivers for the market. The production targets for member states are largely fixed until December 2026. Additionally, the eight producer countries that implemented voluntary production cuts have already confirmed that they will not increase production in the first quarter. Thus, the short-term production strategy is not on the agenda."

"If OPEC+ restricts a member country too heavily, there is a risk that the country could leave the cartel — something that happened with Angola two years ago. As a result, a compromise by other member states, such as a slight quota increase for Iraq, cannot be ruled out. Ultimately, OPEC+ aims to remain strong as an alliance."