23.10.202615:38:08UTC+00Canadian Dollar Hits Over One-Month High

The Canadian dollar strengthened to around 1.40 per US dollar in October, its highest level in more than a month, as expectations for Bank of Canada (BoC) policy shifted toward tighter conditions. Anticipation of a narrowing interest rate differential between the United States and Canada has supported the loonie, reflecting a more hawkish outlook for the BoC’s upcoming policy decision on October 28th compared with that of the US Federal Reserve.

BoC Governor Tiff Macklem recently indicated that the central bank expects to raise its quarterly inflation forecast significantly this month, following earlier comments highlighting the impact of energy-driven price pressures. The recent rally in oil prices—exacerbated by escalating tensions in the Middle East—has further intensified upward pressure on energy costs.

At the same time, Canadian retail sales are projected to have risen 0.7% month-over-month in September, building on a 1.2% increase in August, reinforcing the stronger inflation outlook.