Canadian Dollar Falls to 6-Week Low

2026-05-27 12:49 By Isabela Couto 1 min. read

The Canadian dollar weakened past 1.382 per USD in late May, its lowest in six weeks, amid a backdrop of soft inflation domestically and risks to growth.

The Bank of Canada’s preferred core inflation gauges slowed more than expected to their lowest levels in five years, signaling easing underlying price pressures outside the energy sector.

The data reinforced recent guidance from the central bank that energy-driven inflation may prove temporary and reduced expectations of additional rate hikes.

Meanwhile, Canada’s GDP is expected to stagnate in the first quarter of 2026, further supporting expectations that the BoC will keep rates unchanged.

In contrast, resilient labor market data and firmer core inflation in the US strengthened expectations that the Federal Reserve could raise interest rates again this year, supporting the US dollar.



News Stream
Canadian Dollar Falls to 6-Week Low
The Canadian dollar weakened past 1.382 per USD in late May, its lowest in six weeks, amid a backdrop of soft inflation domestically and risks to growth. The Bank of Canada’s preferred core inflation gauges slowed more than expected to their lowest levels in five years, signaling easing underlying price pressures outside the energy sector. The data reinforced recent guidance from the central bank that energy-driven inflation may prove temporary and reduced expectations of additional rate hikes. Meanwhile, Canada’s GDP is expected to stagnate in the first quarter of 2026, further supporting expectations that the BoC will keep rates unchanged. In contrast, resilient labor market data and firmer core inflation in the US strengthened expectations that the Federal Reserve could raise interest rates again this year, supporting the US dollar.
2026-05-27
CAD Weakens as Inflation Supports Dovish BoC Outlook
The Canadian dollar weakened to 1.38 per USD in May as softer core inflation data reinforced expectations that the Bank of Canada may continue looking through the impact of higher energy prices. While headline inflation accelerated to 2.8% in April due to rising gasoline costs linked to the Middle East conflict, the Bank of Canada’s preferred core inflation gauges slowed more than expected to their lowest levels in five years, signaling easing underlying price pressures outside the energy sector. The data aligned with recent central bank guidance that energy-driven inflation may prove temporary and reduced expectations of rate hikes. Conversely, robust labor data and higher core inflation in the US raised expectations of a rate hike by the Federal Reserve this year, supporting the US dollar.
2026-05-19
Canadian Dollar Extends Pullback
The Canadian dollar weakened slightly to 1.37 per USD, extending its retreat from the seven-week high of 1.358 reached on April 30, as persistent inflation concerns and rising US Treasury yields supported the greenback following hotter-than-expected US inflation data. The latest US CPI report showed headline inflation accelerating to 3.8%, reinforcing expectations that the Federal Reserve may keep interest rates elevated for longer as price pressures broaden across the economy. Additional support for the US dollar came from ongoing geopolitical uncertainty in the Middle East, as limited progress in negotiations involving Iran kept fears alive that disruptions around the Strait of Hormuz could persist. Meanwhile, elevated oil prices continued to limit broader downside pressure on the commodity-linked Canadian dollar.
2026-05-15