Forex News
- USD/CAD remains on the defensive amid the divergent BoC-Fed policy outlooks.
- The overnight recovery in Oil prices underpins the Loonie and weighs on the pair.
- A positive risk tone dents the USD’s safe-haven demand and favors bearish traders.
The USD/CAD pair enters a bearish consolidation phase during the Asian session on Thursday and oscillates in a narrow band, just below the 1.3800 mark, or its lowest level since October 22. The fundamental backdrop, meanwhile, seems tilted firmly in favor of bearish traders and suggests that the path of least resistance for spot prices is to the downside.
The Canadian Dollar (CAD) continues with its relative outperformance against a broadly weaker US Dollar (USD) in the wake of the Bank of Canada's (BoC) hawkish tilt, signaling that the rate-cutting cycle was over. This marks a significant divergence in comparison to rising bets for more rate cuts by the US Federal Reserve (Fed) and validates the near-term negative outlook for the USD/CAD pair.
In a widely expected move, the BoC held its key interest rate at 2.25% on Wednesday on the back of encouraging third-quarter data, which showed that the Canadian economy has withstood some trade war-induced turmoil. Moreover, BoC Governor Tiff Macklem said during the post-meeting presser that the current rate is at about the right level to give the economy a boost through a structural transition.
This comes on top of increasing chatter that a rate hike was likely in the months ahead and helps offset US President Donald Trump's threat that he could impose fresh tariffs on agricultural products, including Canadian fertilizer and Indian rice. Apart from this, the overnight goodish recovery in Crude Oil prices underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair.
Meanwhile, the US central bank lowered borrowing costs by 25 basis points and projected one more rate cut in 2026. Traders, however, remained hopeful about two more rate reductions ahead in the wake of Fed Chair Jerome Powell's remarks, saying that the US labor market has significant downside risks. Powell added that the Fed does not want its policy to push down on job creation.
This, along with a generally positive tone around the equity markets, dents the Greenback's safe-haven demand and backs the case for a further near-term depreciating move for the USD/CAD pair. Traders now look to the release of Trade Balance data from the US and Canada, which, along with the USD and Oil price dynamics, should provide some impetus later during the North American session.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- WTI price declines to $58.70 in Thursday’s Asian session.
- Traders will closely monitor the developments surrounding the Ukraine peace deal.
- The Federal Reserve lowered interest rates again at its December meeting on Wednesday.
- US crude inventories fell by 1.812 million barrels last week, said the EIA.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $58.70 during the Asian trading hours on Thursday. The WTI price drifts lower on diplomatic steps toward ending the Russia-Ukraine war. Traders will take more cues from the US weekly Initial Jobless Claims report later on Thursday.
US President Donald Trump told Ukrainian President Volodymyr Zelensky that he has until Christmas to accept his deal to end the war with Russia, per the Telegraph. Meanwhile, Zelensky said he is finalizing a revised peace proposal that he will deliver to the US soon, hinting at potential progress as Trump increases pressure on Kyiv to agree to a peace deal with Moscow.
Analysts believe that ending the Russia-Ukraine war would reduce threats to the region’s energy infrastructure and increase predictability on the supply side. This, in turn, could exert some selling pressure on the WTI price in the near term.
The Federal Reserve (Fed) announced its third consecutive interest rate cut this year, lowering the federal funds rate by 25 basis points (bps) to a range of 3.5%–3.75% on Wednesday. Lower rates can reduce consumer borrowing costs and boost economic growth and oil demand, supporting the black gold.
Data released by the Energy Information Administration (EIA) on Wednesday showed that crude oil stockpiles in the US for the week ending December 5 fell by 1.812 million barrels compared to an increase of 574,000 barrels in the previous week. The market consensus was for a decline of 1.2 million barrels in the reported period. A larger-than-expected draw in US crude oil stockpiles could lift the WTI price.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 7.0686 compared to the previous day's fix of 7.0753.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
- AUD/USD drifts lower on Thursday and sticks to a negative bias after mixed Aussie jobs data.
- An unexpected fall in the Australian Employment Change offsets a steady Unemployment Rate.
- The divergent RBA-Fed policy outlooks warrant some caution for aggressive bearish traders.
The AUD/USD pair drifts lower during the Asian session on Thursday and erodes a part of the previous day's strong gains to its highest level since September 17. Spot prices stick to modest losses following the release of mixed Australian employment details and currently trade just above mid-0.6600s, though the downside potential seems limited.
The Australian Bureau of Statistics (ABS) reported that the Unemployment Rate held steady at 4.3% in November compared to the consensus estimate for an uptick to 4.4%. This, however, was offset by a fall in the number of employed people, by 21.3K during the reported month, down from 41.1K in October (revised from 42.2K) and missing the forecast of 20K. This, in turn, undermines the Australian Dollar (AUD) and turns out to be a key factor exerting some pressure on the AUD/USD pair.
That said, the Reserve Bank of Australia's (RBA) hawkish stance might hold back the AUD bears from placing aggressive bets and help limit losses for the currency pair. In fact, RBA Governor Michele Bullock, following the widely expected on-hold rate decision earlier this week, said that the Board discussed what they might have to do if rates need to go up and that it looks like more rate cuts are not needed. This could support the AUD/USD pair amid a bearish US Dollar (USD).
The USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near its lowest level since October 21 in the wake of the US Federal Reserve's (Fed) dovish cut on Wednesday. In a widely expected move, the US central bank lowered borrowing costs by 25 basis points and projected just one more cut in 2026. Traders, however, remained hopeful about further cuts ahead in the wake of Fed Chair Jerome Powell's remarks at the post-meeting press conference.
Powell said that the US labor market has significant downside risks and the Fed does not want its policy to push down on job creation. Investors were quick to react and are now pricing in two more rate cuts in 2026. This, along with the upbeat market mood, continues to undermine the safe-haven Greenback and should contribute to limiting losses for the perceived riskier Aussie. Hence, any further corrective slide might still be seen as a buying opportunity and remain limited.
Economic Indicator
Employment Change s.a.
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. The statistic is adjusted to remove the influence of seasonal trends. Generally speaking, a rise in Employment Change has positive implications for consumer spending, stimulates economic growth, and is bullish for the Australian Dollar (AUD). A low reading, on the other hand, is seen as bearish.
Read more.Last release: Thu Dec 11, 2025 00:30
Frequency: Monthly
Actual: -21.3K
Consensus: 20K
Previous: 42.2K
Source: Australian Bureau of Statistics
Australia’s Unemployment Rate steadied at 4.3% in November, according to the official data released by the Australian Bureau of Statistics (ABS) on Thursday. The figure came in below the market consensus of 4.4%.
Furthermore, the Australian Employment Change arrived at -21.3K in November from 41.1K in October (revised from 42.2K), compared with the consensus forecast of 20K.
The participation rate in Australia decreased to 66.7% in November, compared to 66.9% in October (revised from 67%). Meanwhile, Full-Time Employment decreased by 56.5K in the same period from a rise of 53.6K in the previous reading (revised from 55.3K). The Part-Time Employment increased by 35.2K in November versus a decline of 12.5K prior. (revised from -13.1K)
Sean Crick, ABS head of labour statistics, said with the key highlights noted below
Both the number of unemployed and employed people fell in November, by 2,000 and by 21,000 respectively.
Full-time employment fell by 57,000 people, with males falling by 40,000 and females by 16,000 people.
The employment-to-population ratio fell by 0.2 percentage points to 63.8 per cent this month.
Market reaction to the Australia’s employment data
The Australian Dollar (AUD) attracts some sellers following the employment data. At the time of writing, the AUD/USD pair is trading 0.26% lower on the day to trade at 0.6662.
Australian Dollar Price Last 7 Days
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies last 7 days. Australian Dollar was the weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.29% | -0.28% | 0.28% | -1.14% | -0.98% | -0.73% | -0.05% | |
| EUR | 0.29% | 0.00% | 0.55% | -0.87% | -0.69% | -0.44% | 0.24% | |
| GBP | 0.28% | -0.01% | 0.58% | -0.86% | -0.70% | -0.45% | 0.23% | |
| JPY | -0.28% | -0.55% | -0.58% | -1.42% | -1.26% | -1.04% | -0.33% | |
| CAD | 1.14% | 0.87% | 0.86% | 1.42% | 0.17% | 0.42% | 1.09% | |
| AUD | 0.98% | 0.69% | 0.70% | 1.26% | -0.17% | 0.25% | 0.94% | |
| NZD | 0.73% | 0.44% | 0.45% | 1.04% | -0.42% | -0.25% | 0.68% | |
| CHF | 0.05% | -0.24% | -0.23% | 0.33% | -1.09% | -0.94% | -0.68% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
- NZD/USD attracts buyers for the fifth straight day amid the dovish Fed-inspired USD weakness.
- Traders ramped up bets for more Fed rate cuts following Fed Chair Jerome Powell’s comments.
- A positive risk tone and the RBNZ’s hawkish tilt underpin the Kiwi, further supporting the pair.
The NZD/USD pair holds steady above the 0.5800 mark, close to an over two-month high touched the previous day, during the Asian session. Moreover, the fundamental backdrop favors bullish traders and suggests that the path of least resistance for spot prices remains to the upside.
The US Dollar (USD) slumped to its lowest level since October 24 following the Federal Reserve's (Fed) dovish cut on Thursday, which, in turn, is seen as a key factor acting as a tailwind for the NZD/USD pair. In a widely-expected move, the US central bank lowered interest rates at the end of a two-day meeting, but indicated that it will likely pause its easing cycle in January. Adding to this, policymakers projected just one-quarter-percentage-point cut in 2026, the same outlook as in September.
Investors, however, remained hopeful about further cuts ahead in the wake of Fed Chair Jerome Powell's remarks at the post-meeting press conference. Powell said that the US labor market has significant downside risks and the Fed does not want its policy to push down on job creation. Traders were quick to react and are now pricing in two more rate cuts in 2026. This, along with the upbeat market mood, continues to undermine the safe-haven buck and benefit the perceived riskier Kiwi.
The New Zealand Dollar (NZD) draws additional support from the Reserve Bank of New Zealand's (RBNZ) hawkish outlook on the future policy path. In fact, the RBNZ signaled the end of its easing cycle after lowering its policy rate by 25 bps to the lowest level in more than three years in November. This marks a significant divergence in comparison to dovish Fed expectations and validates the near-term positive outlook for the NZD/USD pair amid the absence of relevant economic releases on Thursday.
US Dollar Price This Month
The table below shows the percentage change of US Dollar (USD) against listed major currencies this month. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.87% | -1.10% | -0.31% | -1.33% | -1.85% | -1.42% | -0.51% | |
| EUR | 0.87% | -0.23% | 0.58% | -0.47% | -0.99% | -0.56% | 0.36% | |
| GBP | 1.10% | 0.23% | 1.06% | -0.23% | -0.76% | -0.33% | 0.60% | |
| JPY | 0.31% | -0.58% | -1.06% | -1.03% | -1.57% | -1.14% | -0.22% | |
| CAD | 1.33% | 0.47% | 0.23% | 1.03% | -0.58% | -0.06% | 0.83% | |
| AUD | 1.85% | 0.99% | 0.76% | 1.57% | 0.58% | 0.44% | 1.37% | |
| NZD | 1.42% | 0.56% | 0.33% | 1.14% | 0.06% | -0.44% | 0.93% | |
| CHF | 0.51% | -0.36% | -0.60% | 0.22% | -0.83% | -1.37% | -0.93% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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