CANADA FX DEBT-Canadian dollar hits four-week high as BoC's guidance turns more hawkish
By Fergal Smith
TORONTO, Oct 29 (Reuters) - The Canadian dollar strengthened to a four-week high against its U.S. counterpart on Wednesday as the Bank of Canada cut interest rates and signaled a possible end to its easing campaign.
The loonie CAD= was trading 0.4% higher at 1.3889 per U.S. dollar, or 72.00 U.S. cents, its strongest level since September 30.
The Bank of Canada reduced its benchmark interest rate by 25 basis points to 2.25%, as expected, and said the rate is at about the right level to keep inflation close to target while helping the economy through a period of structural adjustment due to the U.S.-led trade war.
"Whilst Governor Macklem and Co. left the door open for further easing if necessary, the Bank’s guidance steers away from that scenario as a base case," Nick Rees, head of macro research at Monex Europe Ltd, said in a note. "The result is a somewhat more hawkish outcome than many had expected, with the loonie bouncing higher as a consequence. "
Investors see little chance of another rate cut this year and are leaning against a move in 2026. 0#CADIRPR
An increase in the price of oil, one of Canada's major exports, added to tailwinds for the loonie. U.S. crude futures CLc1 were trading 1.1% higher at $60.81 a barrel after data showed U.S. crude and fuel inventories drew down more than expected last week.
The U.S. dollar .DXY steadied against a basket of major currencies ahead of an expected interest rate cut later on Wednesday by the Federal Reserve.
Canadian bond yields moved higher across the curve.
The 10-year yield CA10YT=RR was up 8.2 basis points at 3.125%, its highest level since October 16, while the gap between it and the U.S. equivalent narrowed by 6.8 basis points to 87.2 basis points in favor of the U.S. note.
Related Articles
Silver Frenzy Returns: Gold-Silver Ratio Falls Below 50 for First Time in 14 Years — Why Is Goldman Going Long?
TradingKey - Spot silver prices broke through the $90/oz mark this week, while the gold-to-silver ratio—a key indicator measuring their relative value—briefly fell below 50, hitting a 14-year low.
Cardano Price Prediction: When Will ADA Price Rise and Can It Reach $10 by 2030?
In early 2026, Cardano rebounded from its lows, with ADA trading at approximately $0.41, a gain of over 24% in seven days. Short-term resistance levels for ADA are set at $1 and $1.3, with any breakout contingent on ecosystem growth, macroeconomic factors, and Bitcoin's performance. Reaching $10 wit
TradingKey 2025 Markets Recap & Outlook | Gold Records Its Best Performance in Half a Century, Wall Street Predicts $5,000 Breach in 2026
TradingKey - Amid escalating global economic uncertainty, gold is experiencing its best performance since 1979, achieving its largest increase in 46 years. As 2025 draws to a close, major Wall Street institutions have confirmed gold's status as the best safe-haven asset, with a consensus forming tha
European Central Bank 2026 Monetary Policy Outlook And Euro Exchange Rate 2026 Trend How?
TradingKey - The Federal Reserve has initiated an interest rate cut cycle, implementing its third consecutive rate cut since September this year, while the European Central Bank (ECB) has maintained a wait-and-see approach, keeping interest rates unchanged at 2.15% since July this year. In 2026, the Federal Reserve will maintain an accommodative monetary policy. If the European Central Bank maintains its current stance, what will be the future direction of the Euro exchange rate?
Gold Price Steady Climb and the Sudden Surge of Silver and Copper: Will Their Bull Run Extend Into 2026?
Dow Jones Market Data shows this marks the first time since 1980all three metals—gold, silver, and copper—simultaneously refreshed their all-time highs in the same year. Will this rally extend into 2026?
