2026.10.2814:14:01UTC+00Canadian 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, a move that had already been largely priced in by markets. The central bank raised its benchmark rate by 25 bps, as expected, and signaled that further increases may be needed. Policymakers also upgraded their inflation and economic growth forecasts.

At the same time, the currency remained sensitive to developments in the United States. The Federal Reserve was expected to leave interest rates unchanged in October after a 25 bps hike in September, while investors closely watched the US midterm elections. Speculation increased over the prospect of a last-minute tariff-relief agreement with Canada that could offer a political boost to US Republican candidates. Prime Minister Mark Carney, however, noted only a slight intensification in trade talks.