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Canadian Dollar Update, June 18, 2026 – Canadian Dollar jumps into the abyss

Published by KnightsbridgeFX
June 18, 2026 | Daily Update

Canadian Dollar jumps into the abyss

  • FOMC result deemed hawkish-Fed rate hike expected in September
  • Oil prices consolidating losses as oil tankers traverse the Strait of Hormuz
  • US dollar rallies across the board

 

USDCAD open: 1.4125, overnight range 1.4095-1.4133, close 1.4101, WTI 74.40, Gold 4,269.16

The Canadian dollar tanked on the heels of a hawkish FOMC meeting and it is still looking for a floor in early New York dealing today.

WTI oil prices leaned lower in a 74.16-76.42 range. The decline was held in check by Wednesday’s EIA report, which showed US crude inventories drawing down by 8.262 million barrels, a steeper fall than forecast. Working the other way, Reuters says three Saudi-flagged supertankers have now transited the Strait of Hormuz.

The Fed kept its benchmark rate parked in the 3.50% to 3.75% band at Wednesday’s meeting, which fooled no one. The blindside came from the dot-plot projections, which flashed a clear message that the next move in rates may be upward. Layer on a meaningful upgrade to inflation expectations and a stated focus on wrestling price growth back down, and traders have shifted to pricing a September hike.

The dollar index rocketed from 99.59 a day earlier to 100.77 in New York trade today, while equity markets around the globe took a beating.

Equity markets in Asia closed in mixed fashion. Japan’s Topix gained 1.37%, lifted by the US-Iran peace signing, while Hong Kong’s Hang Seng slid 1.59% on the view that the FOMC had turned hawkish, the same fear that pulled Australia’s ASX 200 down 0.62%.

By 7:30 am, France’s CAC 40 was down 0.18%, the German DAX had fallen 0.16% while Britain’s FTSE 100 had shed 1.10%. S&P 500 futures are up 0.64%, the 10-year Treasury yield is 4.45%, and the DXY at 100.74.

EURUSD slid in a 1.1454-1.1529 range, pressured by talk that stubborn inflation might push the Fed to lift rates to 4.00% as early as September, well ahead of prior expectations. Its losses could prove contained as the close of the US-Iran war drags oil lower and crude shipments resume through the Strait of Hormuz. Elsewhere, the Norwegian and Swiss central banks both stood pat on rates.

GBPUSD fell in a 1.3211-1.3325 band, on the back foot as the FOMC dots pointing to higher US rates clashed with the Bank of England’s decision today to hold at 3.75%. The UK jobs data showed unemployment easing to 4.9% from 5.0%, alongside a 100,000 rise in employment over the three months to April, short of the prior 148,000.

USDJPY stayed firm but confined to a tight 160.48-160.89 span. Bets on a September Fed hike kept the pair underpinned, though the threat of official intervention capped the upside.

AUDUSD weakened in a 0.7005-0.7042 range, hurt by the broad bid for dollars, with the downside cushioned only by the lingering effect of RBA Governor Michele Bullock’s recent hawkish remarks.

Today’s Canadian data includes Industrial Product Price and Raw Materials Price Index for May. The US releases weekly jobless claims and the Philly Fed manufacturing survey.