Loonie Inches Higher as Traders Eye GDP and Fed Path

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3900-1.4150

Euro                 1.6110-1.6360

Sterling            1.8410-1.8660

WTI Oil (opening level) $59.03

The CAD/USD is opening at 1.4029 ( 0.7128 )

Statistics Canada is set to disclose the GDP figures this morning.

For USD/CAD, a stronger-than-expected result could give the CAD a brief lift.

But any reaction is likely to be short-lived, given that the pair has been moving almost entirely to the rhythm of the USD lately.

And that, in turn, comes down to shifting market expectations about when the next Fed rate cut will be.

CAD has managed to appreciate a tad since its lows earlier this month, prompting USD/CAD to move back below 1.4050.

Further gains appear possible but will stay above the key 200-day SMA near 1.3922.

Headlines

• Trading of futures and options on the Chicago Mercantile Exchange (CME), one of the world’s largest exchanges, was halted in early Friday trading due to a cooling issue at CyrusOne data centers. The halt has affected contracts including those for key commodities, Treasuries and S&P500 futures.
• Turbulence arose after the UK’s Office for Budget Responsibility released its report early, showing weaker growth and higher inflation forecasts. Investors were reassured by Chancellor Rachel Reeves expanding the fiscal buffer to £22 billion and bond issuance below expectations at £303.7 billion. Despite concerns over delayed fiscal tightening, traders found the package less severe than expected.
• Core consumer prices in Tokyo rose 2.8% year-on-year in November, slightly above expectations, fueling speculation of a December rate hike by the Bank of Japan amid persistent inflation and a weak yen. However, Governor Kazuo Ueda warns that global trade volatility may affect growth, leaving the timing uncertain.
• Germany's GfK Consumer Climate Indicator rose to -23.2 for December 2025 from -24.1. Buying willingness improved, and saving willingness decreased. Economic expectations and income expectations both declined. Consumer sentiment is stable compared to last year, suggesting strong Christmas sales, but no significant near-term recovery is expected.
• During the October 29–30 meeting, ECB policymakers opted to keep interest rates unchanged due to uncertainty, with some suggesting no further easing is needed. The policy was deemed appropriate, thanks to a strong economy and inflation near target. They highlighted the 2% deposit rate as robust enough for managing shocks. With conditions meeting projections, some thought rate cuts might be finished, while others recommended staying open to future changes.
• The Eurozone Economic Sentiment Indicator rose to 97.0 in November 2025 from 96.8 in October. Confidence improved in services, retail, and construction, while manufacturing declined and consumer confidence stayed unchanged. Inflation expectations rose, with consumer expectations up 1.2 points to 23.1, and manufacturers’ up 2.1 points to 9.9. ESI improved in Spain, Italy, and France, and remained stable in Germany and the Netherlands.

Key Points

• Equities: Thanksgiving holiday left U.S. shut, while Europe edged higher on Fed cut and peace hopes and Asia firmed
• Volatility: VIX back near 17, mild downside skew, low holiday volumes.
• Digital assets: BTC steady above 91k with small ETF inflows, ETH/ETHA and major alts stabilise
• Fixed Income: Diverging rates outlook in the US and Japan a key focus
• Currencies: Dollar holds weekly loss amid rate cut focus
• Commodities: Silver and platinum lead strong weekly gain across metals