CAD AI Market Pulse, Tuesday, 10 November 2026
JAFX AI’s read of the news on CAD (Canadian dollar), as it stood at the end of the day: read at 16:18 UTC.
Bias: bearish
CAD on the back foot. Hot US CPI and NFP cement Fed December hike bets while weak Canadian jobs and sliding oil erode the BoC hike case. USD/CAD at 1.4167, highest since Oct 16.
US October CPI beat forecasts. That revived the USD and firmed pricing for a December Fed hike, lifting USD/CAD 0.34% to around 1.4167, above the 1.4140 descending-channel top flagged earlier. Crude fell to its lowest since August on hopes for US-Iran diplomacy, after Trump said further strikes might not be necessary. That added a second headwind for the commodity-linked loonie, which fell even when the DXY dipped on Monday.
The past week
CAD started the week strong: USD/CAD fell to mid-1.3900s, a low since Sept 16, after a Democratic midterm sweep hit the USD. Friday's jobs divergence flipped that. US NFP came in at 165K vs 65K expected, while Canada lost 4.7K jobs vs +13.6K expected, unemployment rose to 6.7% and wage growth slowed to 2.0%. USD/CAD jumped 0.78% to about 1.4120 and has kept climbing. Macklem's Nov 5 testimony kept the hike door open, but the soft labour data undercut that message. A firm Ivey PMI (58.3 s.a.) was ignored.
The bigger picture
The regime is Fed-vs-BoC divergence: the Fed is leaning toward more tightening while Canada's labour market deteriorates, overlaid by oil weakness tied to US-Iran de-escalation. TD Securities sees USD/CAD staying supported above 1.40 on diverging jobs data.
Positioning
The policy divergence (Fed hike in December, BoC hike doubts) is now consensus. USD/CAD has run from the mid-1.3900s to 1.4167 in under a week. A dovish BoC Summary of Deliberations would largely confirm what is priced, so it may extend CAD weakness only modestly. A clearly hawkish read, echoing Macklem's 'door open' remarks, has more room to trigger a CAD short-covering bounce.
Scenarios it set out
- BoC Summary of Deliberations (18:30 UTC) shows members still weighing further hikes and inflation concern dominating CAD steadies or squeezes higher given the stretched move. USD/CAD likely slips back below 1.4140 toward the 1.4120 area, with the 9-day EMA near 1.4062 the next reference.
- Deliberations stress labour-market slack and a bar to further hikes or a lean toward pause This confirms the divergence trade. CAD weakens further and USD/CAD holds above 1.4140 and extends past 1.4167 to fresh highs since mid-October.
- Deliberations balanced or non-committal, with crude still sliding on Iran-deal headlines Oil and US CPI momentum stay the drivers. CAD remains heavy, with USD/CAD dips likely shallow given TD's view that 1.40 is a firm support zone.
What it said to watch
- Whether USD/CAD holds above the 1.4140 channel top. A close back inside the channel would signal fading USD momentum.
- 1.4167 day high (highest since Oct 16) as the breakout reference.
- WTI/crude reaction to US-Iran diplomacy headlines. Further downside compounds CAD weakness.
- December Fed hike pricing following CPI, plus any US PPI follow-through.
- Whether BoC December hike pricing erodes further after the deliberations summary.
Risk ahead, as it saw it
BoC Summary of Deliberations today at 18:30 UTC, in about 2h. Canada October CPI package (headline YoY, BoC core, trimmed mean, median) is due Mon Nov 16 at 13:30 UTC. No forecasts are provided yet; it is the key input ahead of the BoC's December decision.