Canadian 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, with the move largely priced in by markets. The central bank raised its benchmark interest rate by 25bps, as expected, and signalled that further increases may be necessary. Policymakers also revised their inflation and economic growth forecasts higher. Meanwhile, the currency remained sensitive to developments in the US, where the Fed was expected to leave interest rates unchanged in October following a 25bps hike in September, while investors also monitored the US midterm elections. Speculation has grown over the possibility of a last-minute tariff-relief deal with Canada that could provide a political boost to US Republican candidates. Prime Minister Mark Carney, however, said that there’s a slight intensification in trade discussions.
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, with the move largely priced in by markets. The central bank raised its benchmark interest rate by 25bps, as expected, and signalled that further increases may be necessary. Policymakers also revised their inflation and economic growth forecasts higher. Meanwhile, the currency remained sensitive to developments in the US, where the Fed was expected to leave interest rates unchanged in October following a 25bps hike in September, while investors also monitored the US midterm elections.
Speculation has grown over the possibility of a last-minute tariff-relief deal with Canada that could provide a political boost to US Republican candidates. Prime Minister Mark Carney, however, said that there’s a slight intensification in trade discussions.