Last week, Canada’s November employment report showed that while the number of employed people exceeded expectations, the unemployment rate rose significantly from 6.5% in the previous month to 6.8%. This led to strong selling of the Canadian dollar against the yen, pushing the exchange rate below 106 yen.
At this week’s Bank of Canada (BOC) meeting, market predictions are divided between a 0.25% and a 0.5% interest rate cut. In the previous meeting, Canada implemented a 0.5% rate cut, showing its aggressive stance compared to other major countries. There is a high likelihood that they will opt for another 0.5% cut this time as well. If the rate cut is limited to 0.25%, the Canadian dollar may temporarily rise, but it is expected to face resistance due to factors like U.S. tariffs under Trump’s policies.
This Week’s CAD/JPY Forecast Range: 107.50–104.80
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