Canadian Dollar Rises on US Dollar Weakness

The Canadian dollar strengthened past C$1.42 per US dollar, rebounding from an 18-month low of 1.428 on October 12th amid a broad decline for the greenback and hawkish bets for the bank of Canada. Strong Canadian manufacturing sales boosted expectations of a Bank of Canada rate hike at its next meeting, with a majority of the market positioned for the central bank's first hike this cycle. Manufacturing sales rose 1.5% month-over-month to C$79.9 billion in August 2026, beating expectations for a 1.1% increase and marking the sharpest rise since April. However, the upbeat data contrasted with signs of a cooling economy, as employment fell by 68,300, far below expectations for a 7,000 increase, pointing to a weaker start to the third quarter. Uncertainty over US-Canada trade relations also persisted.