Canadian Dollar Outlook Hinges on Central Bank's Rate Decision, Macklem's Comments, Commerzbank Says

07:13 AM EDT, 10/28/2026 (MT Newswires) -- The Canadian dollar's direction will hinge on the Bank of Canada's rate decision on Wednesday and Governor Tiff Macklem's comments that follow, according to Commerzbank Research in a note. Financial markets are widely expecting a 25-basis-point rate hike to 2.5%, following the BoC's recent hawkish signals. However, Commerzbank said in the Wednesday note that it views a hike as premature, given that core inflation stands at 2.1% annually. Investors will focus on the BoC's December rate outlook and updated inflation forecasts, as rising oil prices and persistent inflation expectations could strengthen its commitment to curbing inflation, wrote Commerzbank. If the BoC delivers the expected rate increase and maintains a hawkish tone, the Canadian dollar may remain broadly stable, added the bank. A rate hold or dovish comments could weaken the currency by lowering expectations for further hikes. Canada's central bank is scheduled to release its rate decision and Monetary Policy Report (MPR) at 9:45 a.m. ET Wednesday, followed by a press conference.