USD/CAD holds above key 1.4000 support – BBH

FXStreetNov 18, 2025 12:21 PM

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USD/CAD remains above 1.4000 as Canada’s core inflation prints persistently above the 2% target, supporting the Bank of Canada’s guidance that policy easing may be over. Markets now price steady rates at 2.25% over the next year, limiting further CAD weakness, BBH FX analysts report.

Canada’s core inflation remains above target

"USD/CAD is holding above 1.4000. Canada’s sticky underlying inflation backdrop backs the Bank of Canada’s (BOC) guidance that it might be done easing. In October, headline CPI eased to 2.2% y/y (consensus: 2.1%, BOC Q4 forecast: 2.0%) vs. 2.4% in September, reflecting lower gasoline prices. Excluding food and energy, CPI rose to an eight-month high at 2.7% y/y vs. 2.4% in September."

"Core CPI (average of trim and median CPI) printed at 2.95% y/y (consensus: 3.00%, BOC Q4 forecast: 2.9%) vs. 3.10% in September, persistently above the 2% target. Markets imply a steady BOC policy rate at 2.25% over the next 12 months and rate hikes in the next two years. That limits CAD downside."

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