Canadian Dollar Records Sixth Consecutive Weekly Drop
The Canadian Dollar Declines for Sixth Straight Week Amid Global and Domestic Challenges
The Canadian dollar weakened against its U.S. counterpart on Friday, extending a six-week losing streak as investors weighed a range of challenges, including China’s faltering economy and domestic uncertainties.
The loonie slipped 0.3% to 1.4440 per U.S. dollar, or 69.25 U.S. cents, edging closer to the five-year low of 1.4467 it reached last month. The currency traded between 1.4384 and 1.4463 during the session and ended the week down 0.2%, marking its longest weekly decline streak since August 2023.
“Much of the Canadian dollar weakness over the past year has been driven by U.S. dollar strength, but that’s not the case today,” said Adam Button, chief currency analyst at ForexLive. “As a global growth proxy, the Canadian dollar needs a resurgent China in 2025, and right now, China is struggling.”
Canada, a significant commodities producer, often sees its currency move in line with global growth prospects. China’s plans to sharply increase funding through ultra-long treasury bonds in 2025 aim to boost business investment and consumer spending, signaling efforts to revive its slowing economy.
Domestically, the loonie faces additional pressures, including potential U.S. tariffs on Canadian imports and political uncertainty. Prime Minister Justin Trudeau is under mounting pressure to resign following the resignation of his finance minister on December 16.
Meanwhile, the U.S. dollar weakened against a basket of major currencies on Friday but posted its fifth consecutive weekly gain, buoyed by expectations that the U.S. economy will continue outperforming its global peers.
Canadian bond yields ticked higher, with the 10-year yield up 1.2 basis points to 3.233%.
This ongoing decline highlights the Canadian dollar’s vulnerability to external economic factors and domestic instability as it navigates uncertain global conditions.
