Canadian Dollar Update, October 15, 2026 – Canadian Dollar is back from the brink

Canadian Dollar is back from the brink

• Tech stock rout fuels safe-haven demand for bonds
• CAD/US yield spreads narrow sharply.
• US dollar under pressure.

USDCAD open (6:00 am): 1.4204, overnight range 1.4195-1.4241, close 1.4238, WTI $94.50, Gold $4,156.80.

The Canadian dollar is at the top of its October range after the greenback gave back the swagger it picked up from Wednesday’s CPI report. The 10-year Treasury yield did much of the heavy lifting, tumbling to 5.073% from 5.31% on Tuesday and squeezing CAD/US yield spreads hard. The 10-year spread tightened to -120.4 this morning from -136.1 yesterday, while the 2-year spread closed in to -149.4 from -161.8.

WTI spent the night trapped in a $93.59-$95.38 band and is parked near $95.00

Markets around the world are still nursing a hangover from yesterday’s hotter-than-expected US inflation numbers and a tech selloff that sent investors scrambling into the safety of bonds. The US 10-year Treasury yield briefly topped 5.32% after the CPI release, then collapsed to 5.073% by early New York trading.

The Fed offered little in the way of comfort. Chicago Fed President Austan Goolsbee labelled the inflation print unacceptable, and Richmond Fed President Tom Barkin said a hike this month is on the table. Futures traders are less excitable, with the CME FedWatch tool putting the probability of an October 28 rate hike at 30%.

Asian stocks delivered a split decision. Hong Kong’s Hang Seng lost 1.01% and Australia’s ASX 200 slipped 0.40%, while Japan’s Topix bucked the trend with a 1.31% gain.

As of 7:25 am, the UK FTSE 100 is up 0.59% and the French CAC-40 has added 0.18%, while the German DAX is off 0.47%. S&P 500 futures are 0.31% lower, the US 10-year Treasury yield sits at 5.073%, the DXY is at 102.02 and gold (XAUUSD) is trading at $4,155.87.

EURUSD marched higher in a 1.1151-1.1241 range, grinding up through Asia and into the European session as US yields backed off and the dollar handed back its post-CPI bounce. Still, France’s ongoing budget headaches could put a lid on further gains. Eurozone industrial production dropped 1.1% y/y in August.

GBPUSD recovered in a 1.3184-1.3276 band, with cable erasing all of yesterday’s losses after August growth came in stronger than expected. The economy expanded 0.1% in August against forecasts for a 0.1% contraction, nudging up the odds of a November rate hike. Industrial production rose 0.8% and manufacturing climbed 1.2%, both comfortably beating forecasts for modest declines.

USDJPY drifted lower in a 157.59-158.36 range as retreating Treasury yields and safe-haven buying gave the yen a lift, while persistent intervention chatter limited gains. August industrial production slumped 2.4% m/m, deeper than the 1.7% decline expected. Machinery orders, capacity utilization and industrial production barely registered with the market.

AUDUSD took a beating in a 0.6927-0.6981 range, sliding to its lows after Australia lost 39,300 jobs in September when economists had pencilled in a 20,000 gain. The jobless rate stayed at a five-year high of 4.7%, against expectations of 4.6%, and a 73,700 collapse in part-time positions overwhelmed a 34,400 rise in full-time work. The numbers all but kill the argument for another RBA hike.

Todays’ Canadian data includes: August manufacturing sales (forecast 1.1%, previous -0.4%) and wholesale sales (forecast -1.5%, previous 0.3%).

The US data includes:  September PPI (forecast 0.5% m/m, 5.3% y/y), core PPI (forecast 0.3% m/m, 4.4% y/y), retail sales (forecast 0.3% after 1.2%), initial jobless claims (forecast 200K), the Empire State index (forecast 10.3) and the Philly Fed survey (forecast 28.4).