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.
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.