Bullish
USD/CAD rises to 1.3989 as Fed rate hike widens policy gap with BoC
The USD/CAD pair surged to 1.3989 on September 18, 2026, following the Federal Reserve's 25 basis point rate hike to 3.75%–4.00%, its first increase since 2023. This move widened the policy rate gap with the Bank of Canada, which maintained its rate at 2.25% on September 2. The divergence in monetary policies has provided support to the US Dollar against the Canadian Dollar.
Key points
- The Federal Reserve's rate hike to 3.75%–4.00% on September 16, 2026, its first increase since 2023, has strengthened the US Dollar.
- The Bank of Canada held its policy rate at 2.25% on September 2, 2026, maintaining the existing rate gap.
- Canada's retaliatory tariffs on approximately $20 billion of US goods took effect on September 8, 2026, with August inflation holding at 1.9% year-on-year.
Sources
AI-generated from public news sources. Not financial advice.
