Reasons for the decline

Reasons for the decline

The Canadian dollar is a standout performer today. USD/CAD has broken the September low to trade at the worst level since July 31.

There are a few reasons for the decline:

  1. The Sept ADP Canada jobs report was strong with a very strong upward revision
  2. Canadian manufacturing sales were also slightly better than expected
  3. The broad risk tone is positive
  4. The US dollar is broadly softer on growing expectations of a Fed cut on Oct 30 (perhaps misplaced?)

The impressive thing about the drop is that it comes despite a dip in oil prices and the risks around the Canadian election on Monday. The Conservative and Liberals are truly neck-and-neck in what's almost certain to be a minority government. The vote is Monday.