Loonie holds gains after Bank of Canada hike as Fed stands pat

The Canadian dollar held its gains after the Bank of Canada delivered a rate hike, Investing.com reports. The Federal Reserve, by contrast, left rates unchanged, and the US yield curve steepened afterwards, according to investingLive.

The two decisions came after our last update on the UK budget. They give the loonie a clear policy edge on the day, at least on the headlines. The pack does not include the size of the Bank of Canada move or its guidance, so we leave those details aside.

Fed holds, BoC hikes

The Fed's statement was released on October 28. In its Americas session wrap, investingLive says the Fed held rates and the yield curve steepened. It quotes Fed Chairman Kevin Warsh as saying "more information will help". Our sister site reports the vote was split, with two members favoring a hike. See CryptoClick's take on the Fed hold and the December hike debate.

For the Canadian dollar, Investing.com says it held gains after the hike. Traders can follow the pair on the USD/CAD chart and the broad dollar on the DXY chart.

The majors: ECB fixing of October 28

The table shows the ECB reference rates from October 28 against the October 27 fixing. The ECB sets these once a day in the European afternoon. So they predate both the Fed and the Bank of Canada decisions and do not reflect the reaction to either.

The dollar firmed across most pairs into the decision. Over five fixings, EUR/USD is down 0.9% and GBP/USD is down 0.85%, while USD/CHF is up 0.81%. The standout is NZD/USD, which fell 1.57% in one fixing. None of the headlines in our data explains that drop, so we do not assign a cause.

Geopolitics and earnings

Iran remains a driver for oil and risk appetite. investingLive reports that Vice President Vance wrote to Iranian hard-liner Rezaei to revive talks as President Trump weighs new strikes. Citing Axios, investingLive says Qatar-led mediators are trying to convince Iran to allow UN nuclear inspectors in return for some sanctions relief. The same report says a renewed bombing offensive "appears likely shortly after the midterms without a last-minute deal". Iran's foreign minister Araghchi said Iran "continues to give diplomacy a chance to succeed", according to investingLive.

On earnings, investingLive reports that Microsoft's Q1 beat as Azure grew 48%, with capex $6 billion below forecast. Alphabet's Google Cloud revenue jumped 103%, but search and ad sales missed forecasts.

Data and other central banks

• US inventories: wholesale inventories rose 0.6% in September against a 0.5% estimate, investingLive reports.
• Bank of England: the Chancellor sent the Governor the October 2026 remit for the Monetary Policy Committee on budget day.
• Emerging Europe: the Polish zloty fell to its weakest level since November 2023, according to Investing.com.

What to watch next

1. Iran's reply: investingLive's European wrap says Qatari mediators presented Iran with a new draft deal, with a response expected by the end of the week.
2. Asia session: investingLive's calendar for Thursday, October 29 lists lower-tier data only.
3. Fed follow-through: watch how markets digest the split vote and the steeper yield curve, alongside the reaction to Big Tech results.

FXcash Markets Desk