Recent Canadian employment data showing a 68,300 job loss in September and unemployment rising to 6.5% has widened the policy rate gap, with the Bank of Canada holding at 2.25% against the Federal Reserve’s 3.75–4.00% range, supporting USD/CAD near 1.425–1.43 as of mid-October 2026. This divergence, combined with softer Canadian growth and tariff uncertainties, has driven the pair to 18-month highs despite oil prices near $91 per barrel providing some CAD support. Traders are monitoring the BoC’s October 28 decision, upcoming U.S. CPI data, and any shifts in yield differentials or commodity flows that could alter the rate path and exchange rate trajectory through year-end.