The loonie flirted with the psychological 1.40 USD/CAD threshold on September 17 after the U.S. Federal Reserve signalled further rate hikes, sending the Canadian currency to a five-week low. Analysts at FXStreet and Scotiabank warn that wide yield spreads could persist, keeping CAD under pressure despite oil trading above US$100. For mobility programmes denominated in Canadian dollars, the slide translates into higher host-country payroll and allowance costs. A three-month secondment to the eurozone now runs roughly CA$3,200 more in per-diems than it did in early August, according to Mercer’s spot-rate tracker. Companies hedging through forward contracts may be partially insulated, but smaller firms often reimburse at spot, exposing them to budget overruns. Travel suppliers are also reacting. Several TMCs have updated policy benchmarks to trigger re-approvals for trips priced in foreign currencies when exchange swings exceed 3 %. Meanwhile, expatriates paid in CAD but incurring expenses in USD or EUR face reduced purchasing power; payroll teams are reviewing hardship allowances and exchange-rate protection clauses. Economists expect CAD volatility to remain elevated until clarity emerges on the Bank of Canada’s next move in late October. Finance departments are urged to refresh FX assumptions in 2027 mobility cost-projections and to communicate fluctuations transparently to assignees to avoid morale issues.
Source: FXStreet
