Canadian dollar slips to nine-day low as Fed hike expectations build
AI Market Summary
U.S. inflation data strengthened expectations for a near-term Fed hike, lifting U.S. yields and the dollar while pushing the Canadian dollar to a nine-day low. Lower oil prices added pressure on a currency closely tied to energy exports, despite a relatively hawkish Bank of Canada backdrop and a market-implied 57% chance of an October hike. A flatter Canada-U.S. rate differential further supports USD outperformance near term.
Impact level
● Medium
Affected assets
NCFXUSD2CAD/USDT+0.29%
AI Insight · NCFXUSD2CAD/USDTAI Insight
▼ Bearish
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The Canadian dollar fell to a nine-day low of 1.3862 per U.S. dollar, leaving it down 0.2% on the week. U.S. inflation data reinforced expectations the Federal Reserve will raise interest rates next week. Markets are pricing a 57% chance the Bank of Canada hikes at its Oct. 28 decision. A softer oil price also added pressure, with more than 70% of Canadian exports shipped to the United States.
