USD/CAD at 1.3857: the Canadian dollar between tariffs and the Bank of Canada
Updated on September 27, 2026. · Written by Svetoslav Grigorov
VERIFIED USD/CAD trades at 1.3857 Canadian dollars per US dollar, per Xe.com's mid-market exchange rate checked on August 31, 2026 (source).
VERIFIED The Bank of Canada held its interest rate at 2.25% on July 15, 2026 — its sixth straight hold — citing trade uncertainty and the situation in the Middle East. Its following decision was scheduled for September 2 (the outcome is covered in the follow-up below), per MTFX Group.
What's behind the move
HYPOTHESIS Several market outlets attribute the Canadian dollar's weakness to tariff uncertainty — including 25% tariffs on various product categories — combined with the interest-rate gap between the US and Canada, per MTFX Group. A TradingView article described the pair at a 56-month high (roughly four and a half years) earlier in the month, though this site could not independently verify that specific figure. This is the reading circulating this week, not a fact verified by this site.
What this does NOT mean
HYPOTHESIS Bank forecasts cited by MTFX Group point to the pair potentially falling toward 1.3490 by October before rising again toward 1.4310 by December — a wide range that is a reminder that no current level, on its own, predicts where the rate goes over the coming weeks.
What the Bank of Canada decided on September 2
VERIFIED The Bank of Canada held its policy rate at 2.25% at its September 2, 2026 meeting — the seventh straight hold — as markets expected, but flagged stronger upside risks to inflation, according to the Bank of Canada itself. The pair traded between 1.37935 and 1.38962 in early September, with the month's forecasts placing the range between 1.37 and 1.41, according to MTFX Group.
Follow-up (September 27, 2026)
VERIFIED On September 16, 2026 the Federal Reserve raised the target range for the federal funds rate from 3.50%–3.75% to 3.75%–4.00%, by a 12–0 vote, according to the Federal Reserve; the Bank of Canada's rate remains at the 2.25% set on September 2. USD/CAD traded at 1.41495 on September 26, 2026, with a 90-day high of 1.4217 and low of 1.3763, according to MTFX Group.
CALCULATED The gap between the top of the Fed's range and the Bank of Canada's rate widened from 1.50 percentage points (3.75 − 2.25) to 1.75 points (4.00 − 2.25). On August 31, 1.3857 stood at 61.83% of the early-September range (1.37935–1.38962) and at 39.25% of the 1.37–1.41 forecast range; the banks' 1.3490 target for October was 2.65% below it and the 1.4310 target for December 3.27% above. By September 26 the pair had risen 2.11% (to 1.41495), above the top of that monthly forecast range. MTFX's 90-day high of 1.4217 is 2.60% above 1.3857 — Claromercado's own calculation, not a figure published by the source.
HYPOTHESIS A wider rate gap in favor of the dollar is consistent with the further weakening of the Canadian dollar in September. The 90-day range also shows that the 1.3857 of August 31 was not an extreme for the pair: over that window it moved between 1.3763 and 1.4217.
Additional sources consulted on September 27, 2026: Federal Reserve: Federal Reserve issues FOMC statement (September 16, 2026), MTFX Group: USD to CAD Historical Exchange Rates. Sources for the update, September 13, 2026: Bank of Canada: Bank of Canada maintains the policy rate at 2¼%, MTFX Group: US Dollar Forecast September 2026. Sources consulted on August 31, 2026: Xe.com: USD to CAD, MTFX Group: Canadian Dollar Forecast August 2026.
Educational notice: this article is analysis based on public data, may contain errors, and is not financial advice. It is not a recommendation to buy or sell. The decision and the risk are always the reader's own.