The Canadian dollar (CAD) has recently experienced positive momentum fueled by falling unemployment rates and rising oil prices. A notable drop in Canada’s unemployment from 6.9% to 6.5% has strengthened investor confidence in the currency. Additionally, Canada's economic performance showed resilience, with GDP growth surpassing forecasts at an annualized rate of 2.6% in Q3. However, the CAD's strength may face challenges from a declining manufacturing sector, as indicated by a November PMI reading of 48.4, highlighting contraction in that area.
As for the Mexican peso (MXN), it continues to trade within a long-held range of 16.00–22.00 per U.S. dollar, with forecasts suggesting slight depreciation to around 18.92 in 2026. Recent interest rate cuts by Banxico, reducing the benchmark rate to 7.75%, may narrow the interest rate differential with the U.S., altering the appeal of the peso. Trade relations remain a concern, particularly due to tariffs imposed by the U.S. and recent trade suspensions affecting imports from Mexico.
Given the current value of CAD to MXN at 13.14, just below its three-month average, CAD's movements will heavily depend on trends in oil prices, which have recently dipped to 30-day lows at $61.94. This price is 4.1% below its three-month average, reflecting significant volatility in the oil market that typically influences the CAD due to Canada’s status as a major oil exporter.
Analysts emphasize that future performance of both currencies will hinge on ongoing economic developments and shifts in trade policies. The CAD may benefit from potential rebounds in oil prices and stable economic indicators, while the MXN's outlook will be shaped by external trade dynamics and foreign direct investment trends. Monitoring these economic indicators remains crucial for individuals and businesses engaged in currency transactions involving CAD and MXN.
