Canadian Dollar Hits Seven-Week High After US Midterms

The Canadian dollar climbed to a seven-week high on November 4, trading at 1.3965 per US dollar after briefly reaching 1.3930. The currency's gain followed the November 3 US midterm elections, in which Democrats secured control of both the House of Representatives and the Senate.

Market analysts attributed the shift to a broad decline in the US dollar, as investors anticipated that Democratic control of Congress would create resistance to the trade, military, and deregulation agendas of President Donald Trump. This political environment potentially reduced demand for US assets, fueling the USD-CAD sell-off.

Domestic economic data also supported the currency. Statistics Canada reported a September merchandise trade surplus of C$5.35 billion, the highest level since May 2022. However, this surplus occurred alongside a 4% drop in export volumes and a fifth consecutive monthly contraction in the services economy through October.

Dominic LeBlanc, Canada's minister in charge of US trade ties, stated that the election results would not change Ottawa's stance toward trade talks with the United States.