USD/CAD approaches its highest level in a month as CAD begins 2026 on a soft note – BBH

Canadian Dollar Faces Pressure as Labor Data Looms

At the outset of 2026, the Canadian Dollar is experiencing downward momentum, with USD/CAD nearing the 1.3900 mark. This movement comes just before the release of December’s labor force survey, according to analysts at BBH FX.

CAD Struggles Amid Uncertain Employment Trends

So far this year, the Canadian Dollar has ranked among the weakest major currencies, with USD/CAD trading close to its highest level in a month, just below 1.3900.

The December labor force report for Canada is set to be published today. Forecasts suggest a decline of 2,500 jobs, following unexpectedly robust job creation in the previous three months—53,600 in November, 66,600 in October, and 60,400 in September. With the Bank of Canada having concluded its easing cycle, there is less room for the CAD to weaken further. Current market pricing reflects a 70% probability of a 25 basis point rate hike to 2.50% within the next year.