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.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
USDCADexchange ratesinterest ratesFedCanada
Open a keyword to see other news on the same topic.
Related tickers and likely impact
USD/CAD
▼ Likely negativeRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/28/2026 | 1.39983 |
| Change that session | -0.38% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Canadian Dollar Strengthens Against The Greenback After Bank of Canada Raises Policy Rate
- Will Tiff Macklem play with economic fire ?
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.
- 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.
- Canadian dollar notches nearly four - week high on BoC rate hike bets
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.
- Posthaste: How a 'leaky loonie' could sway Bank of Canada interest rates
The Canadian dollar has weakened in a slow but steady 'leak' against the U.S. dollar, down about 5% since early last summer and as low as 70 U.S. cents this month; it was trading at 70.91 this morning. CIBC says a Fed rate hike this month or in December could push the loonie lower, raising import prices and potentially adding about 0.3 percentage points to inflation, though it is 'nothing to panic over yet.' Capital Economics notes consumer goods import price inflation is already 8.6%, and odds of a Bank of Canada hike at the October 28 meeting have fallen below 30%. The worst-case scenario described is a 50% U.S. tariff on Canada's auto industry from January 1 combined with cooling energy prices, which could turn the next move into a rate cut; if energy prices stay high and the loonie keeps weakening, the central bank may need to hike more aggressively.
- Canadian dollar slips as investors await Bank of Canada, Fed rate decisions
The Canadian dollar weakened on Tuesday as investors positioned themselves ahead of rate decisions from the Bank of Canada and the U.S. Federal Reserve, both due Wednesday. The U.S. dollar rose 0.07% to C$1.4022, leaving the loonie at about 71.32 U.S. cents, after a pause following seven consecutive sessions of gains, its longest winning streak since March 2022. A Reuters poll found that most surveyed economists expected the Bank of Canada to raise its overnight rate by 25 basis points to 2.50%, with views divided between persistent inflation risks and slowing growth. The article adds that the Fed's decision, oil prices and demand for the U.S. dollar could also move the loonie.
Related markets
Latest news
- Euro zone economy slows to 0.4% growth in Q3 as crisis-hit France contracts
Eurostat said euro-area growth slowed to 0.4% in the third quarter from 0.6% in the second, after stagnation in the first three months of the year, and the flash reading beat the 0.2% forecast in a Reuters poll. France's economy unexpectedly contracted 0.1% over July to September as soaring borrowing costs reflected investor concern about a political struggle over reducing its high deficit, amid nationwide unrest over living costs. The ECB held rates steady on Thursday, saying the energy-price shock had not yet fed into second-round effects, though analysts said a further hike in December remains possible if energy costs stay elevated. The central bank also said downside risks to growth had increased.
- Jim Cramer sees more pain for beaten-down AI stocks: ‘I think it’s too soon to say the coast is clear’
The Nasdaq CTA Artificial Intelligence Index, which tracks 58 AI-linked stocks, fell 7.0% over the last month, while the AIQ ETF rose just 0.12% over three months. In his October 18 Investing Club column, Jim Cramer said it is too soon to return to the hardest-hit AI data center stocks and wants to see improved charts, hyperscaler reports, the end of the U.S. election and the Anthropic IPO first. Stockatomics founder Monte Malukas said his AI Infrastructure Index is up about 70% over the past year and memory chip prices have risen nearly fivefold, and he would watch hardware prices and shipment volumes as early signs of weaker demand. Meta reported negative free cash flow of $2.12 billion in Q3 2026 and expects 2026 capex of $135–145 billion, while Harry Hamann of InvestWealth.com said Microsoft, Alphabet, Amazon and Meta point to about $700 billion of capex in 2026. The Anthropic IPO, expected in mid-to-late November at an estimated $1.5–2 trillion valuation, is seen by some as a test of whether AI companies can turn demand into profit.
- US Stock Futures Fall As AMZN, INTC Earnings Trigger Tech Sell-Off: NVDA, RDDT, RIVN, SFM In Focus
Nasdaq-100 futures fell 2.29% and S&P 500 futures 1% in early premarket trading on Friday after Amazon and Intel results sparked a tech sell-off. Amazon shares dropped 7.1% after revenue came in below analyst estimates, with negative free cash flow of $42.4 billion and its 2026 capex projection of $220 billion unchanged. Intel plunged nearly 26% on a disappointing current-quarter forecast citing PC market weakness, while Nvidia slipped 2.7% after Bloomberg reported talks on credit guarantees for an Nscale data center that Anthropic plans to use. Reddit fell about 22% after its CEO flagged declining referral traffic, while Rivian rose over 9% after raising its full-year delivery forecast. Brent crude rose 2.21% to $117.42 a barrel and WTI 2.04% to $104.98 on supply concerns after Houthi attacks on Saudi Arabia intensified.
- Amazon's AI build-out just pushed its cash burn to a record: Chart of the Day
Amazon's free cash flow was negative by more than $42 billion over the 12 months through September, a record cash burn nearly double the previous high of about $23 billion in 2022. Most of the damage came in the third quarter, when Amazon spent about $77 billion on property and equipment, more than double a year earlier, leaving a gap of roughly $33 billion for the quarter. The spending is paying off at AWS, which grew 39% to about $46 billion, its fastest pace in nearly five years, while Amazon's operating margin of nearly 14% was its highest ever. Long-term debt rose to about $173 billion from $66 billion at the end of 2025, and cash fell to about $56 billion from $87 billion. Credit default swap costs on Amazon's debt have risen about 50% since early August, and the stock fell about 4% on Thursday.
- YouTube isn't just dominating TV — it's dominating Google
Ads on living room TVs accounted for more than one-third of YouTube's ad revenue, Alphabet reported earlier this week. YouTube ad revenue rose 9% to $11.2 billion, and the company says it remains the No. 1 streaming platform in the US by watch time. Meanwhile, Meta's Instagram is testing a new “Features” format that allows uploads of videos up to 90 minutes, a major shift from its long-resisted stance on long-form video and a direct challenge to YouTube. The move aims to help creators connect with audiences and to capture the ad dollars that come with longer content. Last year, Instagram also pushed to let users watch Reels on their TVs.
- Google is happy AI is cannibalizing its most profitable business
Executives said on Wednesday's earnings call that strong growth in Google's AI Mode helped slow revenue growth, because the company earns less ad money on AI than on traditional search. Alphabet's stock plunged 12% on Thursday, shedding nearly $500 billion. Pichai said AI investments helped drive the fastest search query growth in five years, and chief business officer Philipp Schindler said most AI Mode queries are incremental, creating more monetization opportunities over time. Pichai also described AI agents as an expansion opportunity rather than a threat to search revenue. Google views the lost revenue as part of its AI investment, betting on a future where AI reshapes how people use the web.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.