{
  "id": 16570173,
  "title": "Canadian Dollar softens despite BoC rate hike expectations",
  "url": "https://urgent.news/2026/10/26/canadian-dollar-softens-despite-boc-rate-hike-expectations",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-26T06:53:41.000Z",
  "source": {
    "name": "FXStreet",
    "slug": "fxstreet",
    "url": "https://www.fxstreet.com/news/canadian-dollar-softens-despite-boc-rate-hike-expectations-202610260653"
  },
  "original_language": "en",
  "account": "The Canadian Dollar (CAD) experienced a slight decrease despite anticipations of a Bank of Canada (BoC) rate hike. The USD/CAD pair was trading near 1.4010 during early European trading hours on Monday. A decline in crude oil prices affected the commodity-linked CAD against the US Dollar (USD). Economists predict that the BoC may raise its overnight rate by 25 basis points (bps) to 2.50% at its October meeting and potentially increase it further by the end of March to pre-empt any further inflation rise. Traders are waiting for the US Federal Reserve (Fed) and Bank of Canada (BoC) interest rate decisions later on Wednesday, as oil prices fell after a report of Qatari mediators being in Tehran to de-escalate regional tensions in coordination with the US. Lower crude oil prices negatively impact the Canadian Dollar, which is a major oil-exporting country. Concerns over renewed military hostilities in the Middle East eased, but the respite may be temporary. A cautious tone from Fed officials could weaken the Greenback against the CAD. Fed Chair Kevin Warsh stated he would not predict future rate decisions, while New York Fed President John Williams suggested one additional rate increase might be appropriate this year. Fed Vice Chair Philip Jefferson and Governor Christopher Waller said there was no need for swift hikes. According to the CME FedWatch tool, the likelihood of no rate change at the October meeting is 90.6%. Analysts at Rabobank note that Canadian confidence gains are partly due to financial markets and the labor market, but the growth outlook remains fragile. Elevated trade tensions and weak post-pandemic investment recovery could reverse some of the improvement in the goods-producing sector, posing risks to Canadian manufacturing. Inflation expectations have risen above the Bank of Canada's 2% target, suggesting limited scope for tighter policy without worsening household stress. Fed Chair Warsh's speech received a slightly softer than average score, indicating a cautious, data-dependent tone. The Canadian Dollar's key drivers include the Bank of Canada's interest rates, crude oil prices, economic health, inflation, and trade balance. The Bank of Canada's policy on inflation influences the CAD's level, and market sentiment, such as risk-on or risk-off investing, impacts the currency. The US economy's condition also plays a crucial role.",
  "summary": "The USD/CAD pair trades with mild gains near 1.4010 during the early European trading hours on Monday. A decline in crude oil prices weighs on the commodity-linked Canadian Dollar (CAD) against the US Dollar (USD).",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "VnExpress Business",
        "title": "Dollar gains over dong",
        "url": "https://urgent.news/2026/10/26/dollar-gains-over-dong",
        "published": "2026-10-26T07:39:47.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}