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exchange ratesinterest ratescentral bankCanadaUSDCAD
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Related tickers and likely impact
USD/CAD
▼ Likely negativeRelevance: high
| Market | Currencies |
|---|---|
| Close on 10/27/2026 | 1.40514 |
| Change that session | +0.27% |
DXY
• NeutralRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/27/2026 | 102.37 |
| Change that session | +0.35% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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The opinion piece by David Rosenberg argues against a Bank of Canada rate hike, even though markets are pricing a hike next week as a near certainty. He says headline inflation near 3% for three straight months stems mostly from gasoline prices, up 28% over the past year, in a global supply shock, while core inflation measures are at or below 2%. He points to weak domestic conditions, including a roughly 1% trend in real GDP growth, more than 40,000 jobs lost this year, a contracting housing market, and wage growth slowing to 2.3% year over year from 3.3% a year earlier. Job vacancies have been flat for seven consecutive months, and collective bargaining agreements average about 3% a year without cost-of-living clauses. In his view, a rate hike would squeeze real incomes and consumer spending, which accounts for around 60% of the economy.
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The Canadian dollar strengthened slightly against the U.S. dollar after the Bank of Canada raised its benchmark rate by 25 basis points to 2.50% on Wednesday, its first increase since July 2023. The BoC warned that persistent energy-price pressures could spread to other goods and services, raised its inflation outlook and signaled further tightening is possible if price pressures persist. Meanwhile, the Federal Reserve held its rate at 3.75%-4.00%, describing economic activity as strong but leaving the timing of its next move uncertain, and the U.S. dollar weakened after the decision. USD/CAD fell roughly 0.03% to 0.04% on the day, with the loonie trading near C$1.399 per U.S. dollar, or about 71.5 U.S. cents. Investors are awaiting U.S. GDP and PCE inflation data due at 8:30 a.m. ET Thursday, which could influence Fed policy expectations.
- Societe Generale Strategist Sees Wide USD / CAD Range as U . S . Growth Leads
Societe Generale Chief Currency Strategist Kit Juckes expects the U.S. dollar to trade between CA$1.20 and CA$1.45 per US$1 over the next decade, citing growth prospects and the gap between the two countries' two-year interest rates, per FXStreet. A move below CA$1.35 would depend on firmer Canadian economic data or a more favorable geopolitical backdrop. The IMF projects U.S. real GDP growth of 2.3% in both 2026 and 2027, versus 1.1% and 1.7% for Canada, narrowing the U.S. edge from 1.2 to 0.6 percentage points next year. Canada's Parliamentary Budget Office cut its forecasts to 0.9% for 2026 and 1.5% for 2027, blaming U.S. tariffs and Canadian countermeasures and expecting subdued growth through the first half of 2027. The Bank of Canada held its overnight rate at 2.25%, with its next decision due Oct. 28.
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The Canadian dollar held most of its gains against the US dollar on Monday, as hawkish remarks from Bank of Canada Governor Tiff Macklem drew more attention than domestic inflation data. The loonie traded 0.3% higher at 1.4095 per US dollar, near its strongest intraday level since September 23. Macklem said the BoC expects to raise its quarterly inflation forecast significantly this month because of persistently high oil and petroleum prices. Swap market data showed about an 80% chance of a BoC rate hike on October 28, up from 30% on Friday, while the benchmark rate has stayed at 2.25% since last October. Canadian bond yields rose across the curve, with the 10-year up 11.1 basis points to 3.940%, as investors also awaited a nonbinding Alberta referendum on secession.
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- Rate announcement to come at 9:45 (ET)
The Bank of Canada's rate announcement is scheduled for 9:45 (ET), followed by a press conference on the Monetary Policy Report at about 10:30 (ET) with Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers. The page states that Canada's financial system has functioned well through a challenging year, with households and businesses in stable financial condition and banks having strengthened their capacity to absorb shocks. However, vulnerabilities have increased in some parts of the system, and a more turbulent global environment poses risks to financial stability.
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