Loonie slides toward 1.40 as Fed–BoC rate gap widens

OPPORTUNITY · Export Alberta · Currency & Trade

The Canadian dollar closed out last week on its longest losing streak since May, with USD/CAD trading just below the 1.4000 mark on September 18 — its weakest level since early August. The driver is a widening policy gap: the U.S. Federal Reserve raised its benchmark rate 25 basis points to 3.75–4.00% while the Bank of Canada held at 2.25%, pushing the differential to 175 basis points, per analysis of the pair. The loonie weakened against most major currencies in the week ending September 18.

The currency move lands against a hard trade backdrop: 50% U.S. tariffs on roughly $20 billion of Canadian exports have been in place since late August, and Canada’s counter-tariffs on U.S. goods took effect September 8.

What it means: If you sell into the U.S. or price in U.S. dollars, a near-1.40 exchange rate is a rare tailwind in an otherwise punishing trade environment — it partially offsets tariff costs and gives you margin room to defend U.S. accounts or price sharply into new international markets. Currency windows close; build your pricing and market-entry decisions around it now rather than after the rate gap narrows.