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.
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Related tickers and likely impact
USD/CAD
▲ Likely positiveRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/16/2026 | 1.41389 |
| Change that session | -0.32% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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