USD/CAD is under pressure near 1.3940 as markets await Canada’s November labor force survey, with modest job losses expected. The Bank of Canada (BOC) is likely done cutting rates, while upcoming USMCA talks remain a potential downside risk for the Canadian economy, BBH FX analysts report.

BOC seen on hold amid subdued hiring outlook

"USD/CAD is trading heavy near 1.3940. Canada’s November labor force survey is up next (1:30pm London, 8:30am New York). The economy is expected to lose -2.5k jobs in November after surprising with strong gains of 66.6k and 60.4k in October and September, respectively. The Q3 business outlook survey indicates subdued hiring intentions over the next 12 months."

"So long as labor weakness doesn’t deepen or widen, the Bank of Canada (BOC) is finished cutting. The swaps market implies steady rates at 2.25% over the next twelve months and a 25bps hike to 2.50% in the next two years. USD/CAD needs to sustain a break below its 200-day moving average (1.3913) to gain downside traction."

"The upcoming review of the United States-Mexico-Canada trade agreement (USMCA) is an ongoing source of uncertainty and a downside risk to Canada’s economy. Businesses and consumers may be cautious as they wait for more clarity about the future of USMCA. The first six-year joint review of the USMCA is scheduled for July 1, 2026."