Canadian Dollar Weakens as Fed Policy and Strong US Dollar Pressure CAD

The Canadian dollar came under pressure during the week ending September 18, with the currency weakening against several major currencies as a stronger US dollar and diverging central-bank policies dominated the FX market. USD/CAD climbed to around 1.4005, its highest level in roughly a month, from around 1.3865 the previous week. The move reflected renewed US dollar strength after the Federal Reserve raised interest rates and maintained a relatively hawkish policy outlook. The Canadian dollar also faced pressure from domestic fundamentals. Canadian inflation remained around 3% in August, above the Bank of Canada's target, but the data did not create a strong case for an immediate policy adjustment. This left the Canadian currency more exposed to changes in global yields and risk sentiment. Oil prices provided only limited support for the loonie. Brent crude remained above $107 during the week, but the benefit normally associated with stronger oil prices was offset by US dollar strength, higher yields and broader risk concerns. USD/CAD was the clearest example of the pressure on the Canadian dollar. The pair's rise toward 1.4005 highlights how interest-rate differentials can outweigh commodity support when US monetary policy becomes more restrictive. MarketMindFX View: USD/CAD remains sensitive to the US-Canada yield gap, oil prices and global risk sentiment. A sustained move above 1.4000 would keep the recent CAD weakness in focus, while a move back below 1.3900 could signal improving demand for the Canadian dollar. Key Levels: USD/CAD Resistance: 1.4000, 1.4050 USD/CAD Support: 1.3900, 1.3860 Other Weekly Moves: EUR/CAD: around 1.6068 GBP/CAD: around 1.8708 CAD/JPY: around 112.65 CAD/CHF: around 0.5891 Forex traders should monitor upcoming Canadian economic data, Bank of Canada expectations, US Treasury yields and crude oil prices for the next major move in USD/CAD. Source: Investing.com, September 18, 2026. MarketMindFX analysis.