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    In November, the Canada Ivey Purchasing Managers Index reported 48.4, below the expected 53.6.

    by VT Markets
    /
    Dec 4, 2025
    The Canada Ivey Purchasing Managers Index (PMI) for November was at 48.4, much lower than the expected 53.6. A PMI below 50 shows a decline in the sector compared to the previous month. This information raises concerns about the health of the Canadian manufacturing industry. Analysts will consider how this might affect future economic policies from the Bank of Canada.

    Impact on Forex Strategies

    The disappointing Ivey PMI of 48.4 for November indicates a downturn in the Canadian economy. This suggests that the Canadian dollar may weaken. Investors might consider shorting the CAD against the US dollar, possibly by buying call options on the USD/CAD pair. This data changes the expectations for the Bank of Canada’s next interest rate decision. November’s Statistics Canada report showed annual inflation fell to 2.7%. The low PMI supports the idea that the Bank may keep rates steady or even lower them in the future. This situation is reminiscent of the long pause in policy we saw in 2024 when the Bank waited for clear signs of economic slowdowns before acting. We should adjust our strategies for interest rate derivatives to reflect a more cautious stance from the Bank of Canada. Futures contracts on Bankers’ Acceptances, or BAX, will likely see more buying interest as traders anticipate a lower chance of a rate hike soon. The recent drop in yields on the 2-year Government of Canada bond, now at 3.8%, further supports this view.

    Currency Volatility Ahead

    This unexpected economic data suggests we might see increased currency volatility in the coming weeks. Buying put options on Canadian dollar ETFs or call options on the USD/CAD pair could be a smart strategy to manage risk while betting on further downturns. Recall the rapid decline of the CAD during the 2022 global growth scare; it shows how quickly market sentiment can change, making options a valuable tool. Create your live VT Markets account and start trading now.

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