Bank of Canada Rate Decision October 2026: USD/CAD Outlook

The Bank of Canada (BoC) announces its latest interest rate decision on Wednesday, October 28, 2026, and markets are leaning toward a rate hike. A move would be the bank’s first in about a year, and it puts the Canadian dollar in focus just hours before the US Federal Reserve decision.

What the Bank of Canada Is Expected to Do

The BoC’s overnight rate is 2.25%. It has stayed there since the bank cut it from 2.50% in October 2025, according to MoneySense. Here is how expectations look going into the meeting:

• Market pricing: about an 81% chance of a 25 basis point hike to 2.50%, which would be the first move in a year, according to investingLive.
• Economist poll: a majority of economists in a Reuters poll expect a hike to 2.50% on October 28 and one more by the end of March.
• Split views: 11 of 15 economists surveyed by The Wall Street Journal expect a quarter-point increase, while others say a hike this early would be an unnecessary risk, as Morningstar reports.

Because a hike is mostly priced in, the surprise can come from the bank’s wording. The BoC will also publish its Monetary Policy Report with new projections on the same day, and its next decision is on December 9.

Why the BoC Is Considering a Hike

1. Oil and inflation

Governor Tiff Macklem said the bank expects to raise its inflation forecast significantly this month because of persistently high crude oil and petroleum product prices, according to Reuters via Kitco. Canada’s September CPI rose to 3.1%, as noted in a Scotiabank preview. To see why crude matters for currencies, read our guide on how oil prices affect forex.

2. Resilient spending

Analysts at Desjardins said strong retail sales data supports a rate increase, according to Reuters.

3. A weaker job market

The case against a hike is the labour market. MoneySense reports Canada lost 68,000 jobs in September and the unemployment rate rose to 6.5%. That is why some economists think the bank should wait.

USD/CAD: Where It Stands Going In

On October 23, the Canadian dollar hit a five-week high of 1.3969 per US dollar, its strongest since September 16, and traded near 1.40 later in the day. US crude oil futures settled 3.8% higher at $103.27 that day, according to Reuters via Kitco. These are snapshots, so check live prices on your platform.

Remember how the pair works: when USD/CAD rises, the US dollar is getting stronger against the Canadian dollar, and when it falls, the Canadian dollar is getting stronger.

Possible Scenarios for USD/CAD

Scenario	What the BoC does or says	Common CAD reaction
Hawkish hike	Raises to 2.50% and signals more tightening	CAD often firms and USD/CAD may fall
Hike with a cautious tone	Raises to 2.50% but calls it a one-off risk management move	Smaller move, and CAD can give back gains because the hike was expected
Hold	Keeps the rate at 2.25%	CAD often drops and USD/CAD may jump, because a hike was widely priced in

These are common patterns, not forecasts or guarantees. Reactions can reverse within minutes, and the Fed decision later the same day can swing the US dollar. Read our Fed decision preview for that side of the story, and our guide on how central bank rate decisions move forex if you are new to this topic.

Other Things That Can Move the Canadian Dollar

• Oil prices: Canada is a major oil exporter, so crude headlines often move the loonie. See our report on oil and currency markets during the Hormuz tensions.
• US and Canada trade news: analysts say uncertainty about trade relations remains a headwind for the Canadian economy and the currency.
• US dollar moves: the Fed decision, plus US GDP and PCE inflation data on October 29, can shift USD/CAD even if the BoC does nothing unexpected.

BoC Decision Time in Nepal

The BoC announcement is due at 9:45 AM Eastern Time on Wednesday, October 28, which is 13:45 UTC and 7:30 PM in Nepal. The Fed follows later, at 11:45 PM Nepal time. Confirm exact times on our economic calendar and use the forex market hours clock to see which sessions are open. US clocks go back on November 1, so New York based events move one hour later in Nepal after that.

How to Manage Risk Around the BoC

• Reduce your position size, or stay flat, if you cannot accept a sudden spike against you.
• Expect wider spreads and slippage at the release. Our guide to forex spreads explains why costs rise during news.
• Know your exact risk before the event with the risk management calculator and our lot size guide.
• Avoid placing stops at obvious round numbers such as 1.4000 right before the announcement.
• Let the first volatile minutes settle before you enter.

Frequently Asked Questions

When is the Bank of Canada rate decision?

The decision is on Wednesday, October 28, 2026, at 9:45 AM Eastern Time. The next scheduled decision is on December 9, 2026.

What is the Bank of Canada interest rate now?

The overnight rate is 2.25% before the October decision. Markets expect a 25 basis point increase to 2.50%.

Does a rate hike make the Canadian dollar stronger?

A hike usually supports a currency, but the reaction depends on what markets already expected. When a hike is fully priced in, the move can be small or even reverse.

This article is for education only and is not financial advice. Forex trading carries a high level of risk and you can lose more than you expect.

Sources: investingLive, Bank of Canada preview; Reuters via Kitco, Canadian dollar hits five-week high; Reuters poll via Kitco; MoneySense; Morningstar.

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