- November 12, 2026
- Posted by: Michel Mandool
- Category: Market News
The US Dollar Gains Ground as Inflation Reshapes Interest-Rate Expectations
Inflation pressures, central-bank policy expectations and geopolitical uncertainty continue to influence global currency markets. Here’s what international businesses should know this week.
CANADA – CAD
The Canadian dollar has weakened approximately 1% against the US dollar this week. Softer Canadian employment data and stronger US inflation figures have contributed to the decline.
Canada’s October unemployment rate increased to 6.7%. The Bank of Canada previously increased its overnight policy rate by 25 basis points to 2.50% on October 28.
For Canadian importers, a weaker loonie means higher costs for US-dollar purchases, while exporters receiving USD may benefit from improved conversion values.
UNITED STATES – USD
The US dollar has strengthened broadly against major currencies this week, supported by stronger inflation data and expectations of further Federal Reserve tightening.
October US inflation increased 0.4% month-over-month, while core inflation rose 0.3%. The Federal Reserve held its policy rate at 3.75%–4.00% on October 28, although two policymakers favoured an increase.
For US businesses, currency movements remain an important consideration when managing international supplier costs and foreign-currency revenues.
GLOBAL DEVELOPMENTS
• Eurozone: Inflation has increased, keeping the ECB focused on energy-related price pressures. The ECB held its deposit rate at 2.50% on October 29.
• United Kingdom: The Bank of England increased its policy rate by 25 basis points to 4.00% on November 5, reflecting persistent inflation concerns.
• Japan: The Bank of Japan maintained its policy rate at 1.25%, while domestic input costs continue to rise.
• Australia: The Reserve Bank increased its cash rate by 25 basis points to 4.85% on November 3. The Australian and New Zealand dollars have also faced pressure from broad US dollar strength.
ENERGY & GEOPOLITICS
Oil markets remain sensitive to Middle East developments and potential supply disruptions. Energy costs continue to influence inflation expectations, transportation expenses and global supply chains.
CORPORATE TAKEAWAY
Currency movements can have a direct impact on margins, cash flow and financial forecasts.
For businesses importing, exporting or making international payments, understanding currency exposure and planning ahead is increasingly important. Forward contracts and other FX risk-management solutions can help provide greater certainty over future payment obligations.
WHAT WE’RE WATCHING
• Upcoming US producer inflation data.
• Canadian October inflation figures.
• UK and eurozone inflation releases.
• Middle East developments and energy markets.
• Upcoming Federal Reserve and Bank of Canada decisions.
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