Canadian Dollar Little Changed After BoC

2026-10-28 14:14 By Joana Taborda 1 min. read

The Canadian dollar was little changed at around 1.40 per USD, as the loonie showed a muted reaction to the Bank of Canada’s first interest rate hike since 2023, with the move largely priced in by markets.

The central bank raised its benchmark interest rate by 25bps, as expected, and signalled that further increases may be necessary.

Policymakers also revised their inflation and economic growth forecasts higher.

Meanwhile, the currency remained sensitive to developments in the US, where the Fed left interest rates unchanged in October following a 25bps hike in September, while investors also monitored the US midterm elections.

Speculation has grown over the possibility of a last-minute tariff-relief deal with Canada that could provide a political boost to US Republican candidates.

Prime Minister Mark Carney, however, said that there’s a slight intensification in trade discussions.



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TSX Steady After BoC Rate Hike
The S&P/TSX Composite Index traded near flat around 36,000 on Wednesday after the Bank of Canada’s policy decision to hike interest rates to by 25 bps to 2.5%, as expected. The bank said the decision aims to reduce the risk that continuing high energy prices spread broadly to the prices of other goods and services while noting that here could be a need to increase the policy rate further. Meanwhile, the US Fed is expected to hold rates steady. Financial stocks were mostly subdued. Agnico Eagle fell 1%, Alamos lost 0.5%, and Kinross dropped 2%, while First Quantum was flat. Teck Resources rose 3.5% ahead of Thursday’s earnings, while Imperial Oil gained 1% and Cameco added 0.2% ahead of Friday’s results. Tamarack Valley climbed 2% after raising its 2026 production forecast, while Trican Well Service surged 6% on higher Q3 profit.
2026-10-28
Canadian Dollar Little Changed After BoC
The Canadian dollar was little changed at around 1.40 per USD, as the loonie showed a muted reaction to the Bank of Canada’s first interest rate hike since 2023, with the move largely priced in by markets. The central bank raised its benchmark interest rate by 25bps, as expected, and signalled that further increases may be necessary. Policymakers also revised their inflation and economic growth forecasts higher. Meanwhile, the currency remained sensitive to developments in the US, where the Fed left interest rates unchanged in October following a 25bps hike in September, while investors also monitored the US midterm elections. Speculation has grown over the possibility of a last-minute tariff-relief deal with Canada that could provide a political boost to US Republican candidates. Prime Minister Mark Carney, however, said that there’s a slight intensification in trade discussions.
2026-10-28
Canadian Dollar Hits Over One-Month High
The Canadian dollar strengthened to around 1.40 per US dollar in October, reaching a more than one-month high as the outlook for BoC policy tilted toward tighter conditions. Expectations of a narrowing US-Canada interest rate differential have supported the loonie, amid a more hawkish outlook for the BoC’s next policy decision, scheduled for October 28th, relative to the US Fed. BoC Governor Tiff Macklem recently said the central bank expects to raise its quarterly inflation forecast significantly this month, following hawkish remarks last week about energy-driven price pressures. The oil rally has added to upward pressure on energy costs amid an escalation in the Middle East conflict. Meanwhile, Canadian retail sales are expected to have increased 0.7% month-over-month in September, extending a 1.2% rise in August, adding to the inflation outlook.
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