Dollar, Loonie and Peso: The Latest Currency Moves in North America
October 15, 2026 | ATN Trade & Finance
Three North American currencies. Three different stories this week — and a US dollar index that fell even as inflation came in hotter than expected.
The US Dollar: Hot Data, Weaker Greenback
The DXY US Dollar Index dropped approximately 0.5% to near 102.0 on October 15, despite the September PPI printing at +1.3% month-over-month — more than double the 0.5% forecast — and the September CPI coming in at 3.7% year-over-year the day before. The counterintuitive dollar weakness reflects traders repricing the Federal Reserve's path: the 10-year Treasury yield spiked above 5.2% on the CPI print before retreating to near 5.09%, suggesting markets view the Fed as constrained rather than emboldened. The Fed's current rate stands at 3.75–4.00%, with its next decision on October 27–28.
The Loonie: Oil Lifts It Off an 18-Month Low
The Canadian dollar hit an 18-month low of 1.428 (USD/CAD) on October 12, then recovered to approximately 1.4170 by October 15 — the loonie's best level of the week — as WTI crude rose 2.2% to near $98 a barrel. Canada's August manufacturing sales beat expectations (+1.5% vs +1.1% forecast), but a sharply weak jobs report — employment fell 68,300 against expectations of a +7,000 gain, pushing unemployment to 6.5% — reinforces the Bank of Canada's case for holding its policy rate at 2.25% on October 28. The US–Canada rate gap of nearly 175 basis points is the structural drag on the loonie. A 50% US tariff on Canadian goods, in effect since August 22, and a US import ban enacted September 29 are adding persistent downside pressure.
The Peso: Carry Trade Unwind
The Mexican peso has weakened roughly 3% against the dollar over the past seven days. USD/MXN was trading at approximately 18.51 on October 14 (up 0.81% on the day), after hitting 18.35 on October 13. The driver is a narrowing yield gap: Banxico has held its benchmark rate at 6.50% since freezing cuts in June 2026, and board members have signaled openness to further reductions as domestic inflation eases. Meanwhile, the Fed is leaning restrictive. Narrower rate differentials are unwinding carry trades that were long peso. Mexico's public debt trajectory — projected toward 55% of GDP — and USMCA review uncertainty are adding to risk-off pressure on the currency.
What this means: Businesses with USD/CAD exposure should watch the October 28 Bank of Canada and Fed decisions closely — both land the same day, and the outcome will determine whether USD/CAD breaks above 1.42 or retreats toward 1.40. For importers and exporters dealing in pesos, the carry-trade unwind has been rapid; hedging costs are rising alongside dollar strength. The broader theme: even with hot US inflation data, the dollar is not immune when markets read the Fed as closer to its ceiling than its floor.
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