Markets almost fully price in a US rate hike, and the loonie slips
The day before a US Federal Reserve decision, traders had a quarter-point hike almost fully priced in. The 10-year US Treasury yield is what investors demand to lend to the US government for ten years. It rose above 5 per cent, its highest level since 2007. Oil traded around US$100 a barrel. Higher oil prices typically support the Canadian dollar, because Canada is a major crude exporter. The loonie, Canada's dollar, still slipped for a fifth straight day, toward 1.39 per US dollar. A higher number means it takes more Canadian dollars to buy one US dollar. FXStreet reported that the Bank of Canada's steady rate left the interest rate gap tilted in favour of the US dollar.
Why this matters
The loonie fell for a fifth straight day. The move came from what markets expected of the US central bank, a day before it met.
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With the Bank of Canada on hold, the Canadian dollar weakened as markets braced for a US rate hike. On September 15, 2026, traders had a hike by the US Federal Reserve, the Fed, almost fully priced for the next day. The 10-year US Treasury yield rose above 5 per cent, its highest level since 2007. The loonie, Canada's dollar, slipped toward 1.39 per US dollar as the rate gap tilted toward the US dollar, FXStreet reported.
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FXStreet
News report
Canadian Dollar remains vulnerable aas Fed takes centre stage
By Vishal Chaturvedi
www.fxstreet.comRead original article (opens in a new tab)
Opening paragraphs on Fed pricing, Treasury yields and oil