Canadian Dollar Weakens to One-Month Low at 1.39 CAD/USD as Rate Hold Disappoints Markets
The Canadian dollar touched its lowest level since August on September 16, trading near 1.39 against the US dollar, as markets processed the Bank of Canada's interest-rate hold and anticipated continued Federal Reserve strength.
The Canadian dollar slipped to a one-month low of approximately 1.39 CAD per US dollar in mid-September 2026, reflecting widening interest-rate expectations between Canada and the United States. The Bank of Canada held steady at 2.25% on September 2, signalling a prolonged pause, while market pricing indicated the US Federal Reserve is more likely to raise rates before year-end.
What's Driving the Weakness?
Updated Federal Reserve projections published after the BoC hold showed most US policymakers expect at least one additional rate hike in 2026, widening the differential in borrowing costs between the two countries. Investors tend to favour currencies in higher-yielding economies, so a stronger US yield environment has pulled money toward the dollar. Additionally, trade tensions between Canada and the US—including new tariffs and Canadian counter-measures implemented on September 8—have added to currency uncertainty.
What This Means for You
If you earn income in US dollars or receive money from the US, your Canadian purchasing power has strengthened; one US dollar now buys about 1.39 CAD versus 1.38 a week earlier. If you hold Canadian dollars and plan to spend or transfer to the US, you'll get slightly less value per CAD—currently around 0.716 USD per dollar. Expats and international students sending money home to Canada will see modest headwinds. The currency remains relatively stable within a 1.37–1.41 range, but watch oil prices and trade news closely; geopolitical tensions in the Middle East and US tariff policy remain the two largest drivers of CAD volatility.
Sources
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