Currency Market Update — August–September 2026: The Dollar Rebounds
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Short answer
This currency market update for August–September 2026 covers a reversal. August brought gains against the US dollar for most currencies in our comparison. September took many of those gains away. The Canadian dollar rose 1.18% in August, then fell 2.27% in September, leaving it 1.12% lower across the two-month period.
The exceptions matter. The Japanese yen strengthened in September, and the South Korean won led the two-month gains in our sample. For Canadian travellers, the practical result depended on the destination: buying US dollars became more expensive in September, while the Canadian-dollar cost of euros barely changed.
This edition continues our June currency-market update, with the same focus on the moves behind the headlines and what they mean when exchanging money.
Rate comparisons use Bank of Canada daily averages for July 31, August 31 and September 29, 2026. September 30 was a Canadian bank holiday, so September 29 is the final September observation. Rankings cover 24 currencies against USD, not every currency worldwide. See the methodology below.
What drove the August–September currency market?
August: a softer US dollar
August offered a break from the dollar strength discussed in our June edition. Twenty of the 24 currencies in this comparison gained against USD over the August measurement period. The Canadian dollar, euro, pound and Australian dollar all finished higher.
MUFG’s September outlook linked August’s weaker dollar to the US Treasury’s bond-buyback announcement. It also noted that the Federal Reserve’s Jackson Hole messaging increased expectations of a rate hike, limiting the dollar’s decline. The important point for a cash-exchange customer is simpler: August’s improvement was real, but it did not establish a one-way trend.
September: interest rates moved back into focus
On September 16, the Federal Reserve raised its target range by 0.25 percentage points to 3.75%–4.00%. Its statement described inflation as elevated. MUFG’s October review linked September’s stronger dollar to rising US yields and renewed monetary tightening.
Other central banks were also responding to inflation. The European Central Bank announced an increase in its deposit rate to 2.50% on September 10, effective September 16. The Bank of Japan announced a policy-rate increase to around 1.25% on September 18, effective September 24.
Canada followed a different path: the Bank of Canada held its policy rate at 2.25% on September 2. The contrast with the Fed increased the policy-rate gap. That is relevant context for USD/CAD, although interest rates alone cannot explain every currency move.
Major currencies: two very different months
The table separates August from September so that a modest two-month result does not hide a sharp reversal. A positive number means the currency gained value against the US dollar.
| Currency | August | September* | Combined |
|---|---|---|---|
| Canadian dollar CAD | +1.18% | −2.27% | −1.12% |
| Euro EUR | +0.88% | −2.35% | −1.49% |
| British pound GBP | +0.68% | −2.40% | −1.74% |
| Japanese yen JPY | −0.20% | +1.45% | +1.24% |
| Australian dollar AUD | +2.00% | −2.53% | −0.58% |
| New Zealand dollar NZD | +0.71% | −4.69% | −4.01% |
| Swiss franc CHF | +0.13% | −3.12% | −3.00% |
| Chinese yuan CNY | +0.45% | +0.29% | +0.74% |
*September measures August 31–September 29, the last available September observation. All changes are against USD.
Calculated from Bank of Canada daily-average rates. August: July 31–August 31. September: August 31–September 29. Combined returns are compounded, not added.
The euro and pound show the pattern clearly: small August gains were followed by larger September declines. The Australian dollar followed the same direction. The yen moved differently, recovering in September after a slight August decline.
Top gainers vs USD, August–September 2026
These are the five largest gains across the full two-month period within our 24-currency sample.
| Currency | August | September* | Combined |
|---|---|---|---|
| South Korean won KRW | +5.23% | +1.01% | +6.29% |
| Taiwan dollar TWD | +1.92% | −0.44% | +1.47% |
| Japanese yen JPY | −0.20% | +1.45% | +1.24% |
| South African rand ZAR | +2.64% | −1.85% | +0.75% |
| Chinese yuan CNY | +0.45% | +0.29% | +0.74% |
*September measures August 31–September 29, the last available September observation. All changes are against USD.
South Korean won: the strongest two-month gain in this sample
The won gained 6.29% against USD across the period. Most of the increase came in August, with a further gain in September. That made it an exception to the broad September reversal. The ranking describes observed performance; it does not establish a single economic cause or imply the gain will continue.
Japanese yen: September changed the picture
The yen gained 1.45% against USD during the September measurement period, leaving it 1.24% higher across both months. The Bank of Japan’s September rate increase is important context for that move. It also provides a useful follow-up to our June edition, which identified the yen as a currency to watch.
Top decliners vs USD, August–September 2026
These five currencies had the largest two-month declines in the same sample.
| Currency | August | September* | Combined |
|---|---|---|---|
| Swedish krona SEK | −0.41% | −4.16% | −4.55% |
| New Zealand dollar NZD | +0.71% | −4.69% | −4.01% |
| Mexican peso MXN | +1.93% | −5.67% | −3.86% |
| Swiss franc CHF | +0.13% | −3.12% | −3.00% |
| Polish zloty PLN | +0.39% | −3.27% | −2.89% |
*September measures August 31–September 29, the last available September observation. All changes are against USD.
Swedish krona, New Zealand dollar and Mexican peso
September accounted for most of the losses in these three currencies. The Mexican peso had gained in August, but its September decline more than erased that improvement. The New Zealand dollar followed a similar pattern, while the Swedish krona declined in both measurement periods.
For travellers, this is a reminder to look at the currency pair they actually need. A peso decline against USD does not translate directly into the same percentage saving for someone paying with Canadian dollars, because CAD also moved.
The Canadian dollar: August’s relief did not last
The Bank of Canada’s daily-average USD/CAD rate moved from 1.4029 on July 31 to 1.3866 on August 31, then to 1.4188 on September 29. These figures express the Canadian dollars needed to buy one US dollar. A lower number is more favourable for a Canadian buying USD.
That means August improved purchasing power for a US trip, but September reversed the improvement. Across both months, CAD lost 1.12% of its value against USD. The percentage rise in USD/CAD is slightly different because it measures the exchange rate in the opposite direction.
Policy divergence is part of the background, alongside the broader dollar recovery. Our article on Canadian dollar weakness explains why interest-rate expectations and other forces can affect the loonie.
What it meant for exchanging money
A CAD 10,000 example: At the August 31 reference rate, CAD 10,000 converted to about US$7,212. At the September 29 reference rate, it converted to about US$7,048 — approximately US$164 less.
This is a historical calculation using indicative daily averages. It excludes retail spreads, fees and differences in the time of exchange; it is not a quote from Keyhan Exchange.
The destination makes a difference. Here is the reference Canadian-dollar cost of four example travel budgets:
| Foreign amount | Aug. 31 | Sept. 29 | Change in CAD cost |
|---|---|---|---|
| US$1,000 | $1,386.60 | $1,418.80 | +$32.20 |
| €1,000 | $1,609.80 | $1,608.40 | −$1.40 |
| £1,000 | $1,878.40 | $1,875.80 | −$2.60 |
| ¥100,000 | $868.00 | $901.00 | +$33.00 |
Someone budgeting for Japan faced a larger Canadian-dollar cost, while the same euro or pound amount cost slightly less. Someone returning with US dollars saw the reverse side of the USD/CAD move: each US dollar had a higher Canadian-dollar reference value at the end of September.
Performance is different from face value
A currency can rise strongly while one unit remains worth only a small fraction of a US dollar. Conversely, a currency with a high value per unit can lose ground during a month. The won’s place at the top of this edition’s performance table is about percentage change, not the dollar value of one won.
Our May edition on the world’s strongest currencies explains that distinction. This update ranks changes over a defined period; it does not rank economies, purchasing power or investment opportunities.
A currency to keep watching: the Japanese yen
The yen’s September recovery makes it worth following as this series continues. Two questions matter: how Japanese policy develops after the September increase, and whether the US rate outlook continues to support the dollar. A single month cannot settle either question.
For a Canadian travelling to Japan, the relevant check is CAD/JPY or its inverse, the Canadian-dollar cost of yen. The yen strengthened against both USD and CAD in the September comparison, but those changes were different in size. A USD/JPY headline alone will not tell you how much cash your Canadian travel budget can buy.
Exchange currency in Rosemère
Keyhan Exchange serves Rosemère, Laval, Boisbriand, Sainte-Thérèse, Blainville and Montreal’s North Shore from 219 boulevard Labelle, Centre Quatre Coins, Rosemère, Quebec J7A 2H3.
- Check the current rate for the currency you need.
- Confirm availability and the final amount before exchanging.
- Use this recap as historical context, alongside today’s quote.
The currencies included in our research sample do not indicate which currencies are currently available in store.
Check Current Exchange RatesFrequently asked questions
Did the Canadian dollar rise or fall in August and September 2026?
It rose 1.18% against USD in August and fell 2.27% in the September comparison, for a compounded decline of 1.12% across the two months. These calculations use July 31, August 31 and September 29 Bank of Canada daily averages.
Which currency performed best in this edition?
The South Korean won had the largest two-month gain, at 6.29%, among the 24 currencies compared against USD. This is a defined sample, not an all-world ranking.
Why does the September calculation end on September 29?
The Bank of Canada did not publish a daily exchange-rate observation for September 30, a Canadian bank holiday. September 29 is therefore the last available September observation used consistently throughout this edition.
Why are these figures different from a bank’s market-close report?
Daily averages and closing snapshots measure rates at different times. Different providers can also track different currencies. Our June edition used MUFG’s Bloomberg closing-rate figures; this edition uses Bank of Canada daily averages for a consistent two-month comparison.
Does a weaker euro against USD mean cheaper euros for Canadians?
It depends on the euro’s movement against CAD. In this September comparison, €1,000 cost CAD 1,608.40 at the reference rate, just CAD 1.40 less than at August 31, despite the euro’s larger percentage decline against USD.
Are these the rates available at Keyhan Exchange today?
No. They are historical reference rates used to explain market movements. Check Keyhan’s current exchange rates and confirm the final quote for your transaction.
Sources and methodology
Methodology: Calculations use Bank of Canada daily-average CAD-per-foreign-currency observations for July 31, August 31 and September 29, 2026. For each foreign currency, its CAD value is divided by the CAD value of USD to obtain its value in USD. CAD’s value in USD is the reciprocal of USD/CAD. Percentage change is (ending value ÷ starting value − 1) × 100. Results are rounded to two decimals; combined changes are calculated from unrounded endpoint values.
Scope: The comparison includes AUD, BRL, CAD, CHF, CNY, EUR, GBP, HKD, IDR, INR, JPY, KRW, MXN, MYR, NOK, NZD, PEN, PLN, SEK, SGD, THB, TRY, TWD and ZAR. USD is the reference currency. Top-five tables rank only this sample. The published precision of the source rates can affect very small changes. These daily averages are indicative and are not executable retail cash rates.
Sources: Bank of Canada daily exchange rates and the underlying July–September observations; Bank of Canada’s September 2 policy decision; Federal Reserve’s September 16 statement; ECB’s September 10 decision; Bank of Japan’s September 18 statement, linked above; MUFG Research’s September 2026 outlook and October 2026 outlook for market context. Calculations by Keyhan Exchange.
Historical market commentary: This article reviews August–September 2026. It is general information, not a recommendation to trade currencies or a forecast of future exchange rates.
