Business · Markets · 8 hrs ago
Canadian dollar reaches five-week high as rate-hike bets grow
The Canadian dollar reached a five-week high against the US dollar on Friday.
The rise came as oil prices climbed, lifting the value of one of Canada's major exports.
Canadian retail sales rose 1.2% in August, and a preliminary estimate showed a further 0.7% increase in September.
Stronger spending has added to expectations of a Bank of Canada rate hike after the bank's governor also made comments seen as favouring higher rates.
Investors put the chance of a hike next week at about 80%.
Economists expect a 0.25-point increase to 2.50% on October 28, followed by one more increase by the end of March.
The bank is expected to act to head off a further rise in inflation expectations.
The Canadian dollar reached a five-week high against the US dollar on Friday as oil prices rose and retail sales data strengthened expectations of a Bank of Canada rate increase.
The currency touched 1.3969 per US dollar, its strongest intraday level since September 16.
It was up 1% for the week and on track for a seventh consecutive day of gains.
Canadian retail sales rose 1.2% in August, and a preliminary estimate showed a 0.7% increase in September.
Investors saw about an 80% chance of a rate increase the following week.
- Who
- The Canadian dollar and the Bank of Canada.
- What
- The Canadian dollar reached a five-week high as expectations grew that the Bank of Canada would raise interest rates.
- When
- Friday, October 23, 2026.
- Where
- Against the US dollar; the article does not state a more specific location.
- Why
- Rising oil prices and resilient Canadian retail sales supported the currency and rate-hike expectations.
This story does not have two clearly opposing sides.
Canadian retail sales rose 1.2% from July.
A preliminary estimate showed retail sales increasing by 0.7%.
The Canadian dollar touched its strongest intraday level since September 16.
The Bank of Canada was expected to raise its benchmark interest rate, according to most economists polled by Reuters.
- Intraday high
- 1.3969 per US dollar
- Friday exchange rate
- 1.40 per US dollar, or 71.43 US cents
- Weekly gain
- 1%
- August retail sales
- Up 1.2% from July
- September retail sales estimate
- Up 0.7%
- Expected rate decision
- 25-basis-point increase to 2.50% on October 28
What people are saying
Given the resilience in these spending numbers, we still believe the Bank of Canada is headed for a rate increase next week