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02.09.202615:44:34UTC+00Canadian Dollar Gains on BoC Hike Bets

The Canadian dollar strengthened to 1.385 per USD after the Bank of Canada highlighted significant upside risks to inflation. At its September meeting, the Bank of Canada left its key policy rate unchanged at 2.25%, as widely anticipated, but warned that inflation risks had risen and that new tariffs had made the growth outlook more uncertain. Policymakers kept the future course of monetary policy open, stating they would adjust rates as needed.

Oil prices, a key Canadian export, remained elevated amid supply disruptions linked to the escalating conflict in the Middle East. Higher energy costs continued to add to inflationary pressures and reinforced expectations for a more hawkish stance from central banks. Canadian government bond yields climbed across the curve.

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