On September 16, 2026, global foreign exchange markets faced one of the month's most important monetary policy events as the U.S. Federal Reserve raised interest rates for the first time since 2023 and signaled that borrowing costs could rise further in the months ahead.

Ahead of the decision, the U.S. dollar had already climbed close to a two-week high as investors positioned for tighter monetary policy.

The rate decision reflects continued concerns about inflation, resilient U.S. economic conditions, and the impact of higher energy prices on consumer costs.

Why Is the U.S. Dollar Strengthening?

Expectations for higher U.S. interest rates have increased significantly in recent trading sessions.

Higher interest rates can make U.S. dollar-denominated assets more attractive to global investors, potentially increasing demand for the currency.

The key question for foreign exchange markets is therefore shifting from whether the Federal Reserve would raise rates to:

Could this mark the beginning of a new U.S. rate-hiking cycle?

If U.S. interest rates continue to rise over the coming months, the impact could extend beyond the dollar, influencing global bond yields, international capital flows, and major currency pairs.

Canadian Dollar Faces Continued Pressure

While the U.S. dollar has strengthened, the Canadian dollar has recently moved in the opposite direction.

By September 15, CAD had weakened against the U.S. dollar for five consecutive trading sessions.

The Canadian dollar is currently being influenced by several factors, including U.S. monetary policy, Canadian economic data, U.S.-Canada trade relations, commodity prices, and expectations surrounding the Bank of Canada's next policy decisions.

Canada's annual inflation rate remained at approximately 3.0% in August. While energy costs continue to contribute to headline inflation, underlying inflation indicators will remain important in determining the Bank of Canada's next steps.

If U.S. interest rates continue rising while the Bank of Canada takes a more cautious approach, the difference between Canadian and U.S. monetary policy could become an increasingly important driver of USD/CAD.

Why Does the Federal Reserve Matter for RMB-to-CAD Exchange?

For clients planning an RMB-to-CAD exchange, a Federal Reserve interest-rate decision is not simply a U.S. market event.

The RMB/CAD exchange rate is influenced by several interconnected factors, including:

• USD/CNY movements;

• USD/CAD movements;

• Federal Reserve monetary policy;

• Bank of Canada monetary policy;

• Global energy prices;

• Canadian and U.S. economic data.

When the U.S. dollar moves significantly, both the Chinese yuan and Canadian dollar can respond, potentially creating noticeable changes in the RMB-to-CAD exchange rate.

Clients preparing for tuition payments, Canadian real estate transactions, family transfers, corporate payments, or large international money transfers should therefore pay particular attention to U.S. and Canadian monetary policy developments in the coming weeks.

KAPU Perspective

The September 16 Federal Reserve decision represents an important shift in the global interest-rate environment.

For clients requiring Vancouver currency exchange, RMB-to-CAD exchange, international money transfers in Canada, or corporate cross-border payments, changes in the relative direction of U.S. and Canadian interest rates could become increasingly important.

With the U.S. dollar strengthening and the Canadian dollar recently under pressure, short-term volatility in RMB/CAD may remain elevated.

KAPU Currency Exchange recommends that clients with defined payment deadlines monitor real-time exchange rates and plan their currency conversions according to actual funding requirements.

For larger transactions, arranging funds in stages according to payment schedules may also help reduce exposure to exchange-rate movements at a single point in time.