Canadian Dollar Hits One-Month High Amid Rate Hike Expectations

Key Facts

1The USD/CAD pair weakened to around 1.4025, its lowest level since September 21.

2Swap market data indicates an 80% probability of a 25 basis point rate hike by the Bank of Canada on October 28.

The USD/CAD pair weakened to approximately 1.4025, marking its lowest level since September 21, 2026. Reuters reported that swap market data currently indicates an 80% probability that the Bank of Canada will implement a 25 basis point interest rate hike during its upcoming meeting on October 28, 2026.

The Canadian Dollar gained strength from elevated crude oil prices, which supported the commodity-linked currency against the US Dollar. This price action follows data released on October 19, 2026, showing Canada's annual inflation rate at 3.1%, while the Common CPI stood at 2.4% on the same date.

The Bank of Canada is scheduled to announce its interest rate decision and release its Monetary Policy Report on October 28, 2026. Markets are pricing in a potential move to 2.50%, with a press conference to follow to address the economic outlook and future policy trajectory.