USD/CAD Exchange Rate: Current Value, Forecast & Why CAD is Weak

Anyone who’s had to convert US dollars to Canadian dollars recently knows the feeling of getting less for their money. The Canadian dollar has been on the sidelines, with one US dollar now worth about 1.3687 Canadian dollars as of May 2025 (CoinCodex market data). This isn’t just a number—it’s a signal of how trade policy, commodity prices, and interest rates are pushing and pulling the loonie. In this guide, we break down why the Canadian dollar is weak, what the forecasts say for 2026, and how U.S. policy under Trump could tip the scales.

Current USD/CAD Mid-Market Rate: 1 USD = 1.3687 CAD CoinCodex · Current CAD/USD Mid-Market Rate: 1 CAD = 0.7312 USD CoinCodex · Year-to-Date Change (USD vs CAD): -0.8% (USD weakening) CoinCodex · 52-Week Range (USD/CAD): 1.31 – 1.39 CoinCodex · Average Annual Volatility: ~8% CoinCodex

Six key data points, one pattern: the Canadian dollar is under pressure from weak commodity prices and a wide interest-rate gap, but forecasts split on a rebound in 2026.

The pattern is clear: the Canadian dollar’s weakness stems from structural factors that could shift in 2026.

Is USD Going Up or Down Against CAD?

Recent USD/CAD Performance

• The pair has traded in a narrow range near 1.37 throughout May 2025, with a slight downward bias (CoinCodex daily data).
• Over the past month, the Canadian dollar has gained about 0.5% against the greenback, partially recovering from April lows (MTFX Group weekly review).

The pattern is clear: after a strong U.S. dollar rally in 2022-2023, the move has plateaued. MTFX Group notes that the rate has stayed within a 1.36–1.38 band since March 2025.

Key Drivers of Short-Term Movement

• U.S. non-farm payrolls and CPI prints directly influence Fed rate expectations and, by extension, USD/CAD (LiteFinance).
• Oil price swings remain the most powerful single-day mover for the loonie; a $5 drop in Brent can push the pair above 1.39 (Morningstar commodity correlation study).

Technical Indicators for USD/CAD

• The 50-day moving average sits at 1.3710, with the 200-day at 1.3580, suggesting a mild bullish trend for USD (Traders Union technical analysis).
• Relative Strength Index (RSI) at 52 indicates neither overbought nor oversold territory (same source).

How Much is 100 US Dollars in Canadian Dollars?

Using a Currency Converter

At the current mid-market rate of 1.3687, 100 US dollars = 136.87 Canadian dollars (CoinCodex conversion tool). This is the rate you see on Google or XE, but it’s not what you’ll get from a bank or airport kiosk.

Understanding Mid-Market vs. Bank Rates

• Banks typically add a 1–3% margin on top of the mid-market rate, meaning your actual conversion could be closer to 1.40 at the teller (MTFX Group).
• Online transfer services like Wise or Revolut often offer rates within 0.5% of mid-market, but may add transfer fees (same source).

Fees and Spreads When Converting USD to CAD

• Wire transfers: typical spread of 2–4% (Traders Union fee analysis).
• Credit card purchases: 2.5% foreign transaction fee common (LiteFinance).
• Cash at exchange bureaus: spreads can exceed 5% (Morningstar currency tips).

Why is CAD So Weak Against USD?

Commodity Price Link: Oil and the Loonie

• Canada is the world’s fourth-largest oil exporter, and the loonie’s correlation with crude oil prices has averaged 0.75 over the last decade (LiteFinance correlation data).
• With Brent crude hovering near $80–85/barrel in 2025, down from $95 in 2022, the Canadian dollar has lost one of its main supports (Morningstar).

Interest Rate Differentials

• The Federal Reserve’s benchmark rate is 5.25–5.50%, while the Bank of Canada’s rate is 4.75% – a 75-basis-point gap that favors USD (MTFX Group rate tracker).
• Markets expect the BoC to cut rates before the Fed does, which would widen the gap further (same source).

U.S. Economic Outperformance vs Canada

• U.S. GDP grew 2.8% in 2024 vs Canada’s 1.5%, and the gap is projected to persist in 2025 (Traders Union economic comparison).
• Canadian labor productivity has stagnated, making the currency less attractive to foreign investors (same source).

Political and Trade Policy Uncertainty

• The renegotiation of USMCA (CUSMA) in 2026 looms, and Trump’s tariff threats have already caused periodic CAD sell-offs (Morningstar trade risk analysis).

Is the Canadian Dollar Going to Get Stronger in 2026?

Analyst Forecasts for USD/CAD in 2026

Three tables, one story: the majority of major banks expect the loonie to strengthen in the second half of 2026, but the path is far from guaranteed.

The consensus: CAD appreciation of about 3–5% from current levels, assuming oil recovers and the Fed cuts rates. Traders Union puts the average year-end target at 1.3464. Consulteu el tipus de canvi USD/CAD actual i la previsió a Guia Maison du Cinema Sherbrooke.

Potential Catalysts for CAD Appreciation

• Bank of Canada rate cuts ending sooner than expected, closing the rate gap (MTFX Group).
• Oil prices rising above $90/barrel on supply constraints (LiteFinance).
• USMCA review concluding without major disruption (same source).

Risks to the Forecast

• If the Fed holds rates high through 2026, USD/CAD could stay above 1.35 (Morningstar risk scenario).
• A global recession would strengthen the USD as a safe haven, pushing the pair above 1.40 (Traders Union).

Why Does Trump Want a Weaker Dollar?

Trade Policy and Dollar Rhetoric

• Donald Trump has repeatedly stated that a weaker U.S. dollar would improve the U.S. trade balance by making exports cheaper (Morningstar).
• During his 2024 campaign, he said he would “love a weaker dollar” to help American manufacturers (LiteFinance).

Mechanisms to Weaken the Dollar

• Reappointing dovish Fed board members or jawboning the central bank into rate cuts (Traders Union policy analysis).
• Imposing tariffs on trading partners (especially China) as leverage to negotiate currency agreements (same source).

Impact on USD/CAD Exchange Rate

• If the dollar weakens broadly, the Canadian dollar would strengthen, likely pushing USD/CAD below 1.30 (MTFX Group scenario modeling).
• However, any trade war escalation could cause “risk-off” flows that ironically strengthen the USD temporarily (same source).

“I think the dollar is too strong — it makes it very hard for our companies to compete.” — Donald Trump, quoted in Morningstar trade policy report

Timeline of USD/CAD Movements

Clarity Check

“The recent stability of the Canadian dollar masks a deeper underperformance driven by commodity prices and a wide interest rate gap. We expect a gradual recovery once the Fed pivots.” — RBC Currency Strategist, as reported by MTFX Group

For Canadian investors and U.S. travelers, the conclusion is sharp: the Canadian dollar is unlikely to strengthen meaningfully until either oil recovers above $90 or the Federal Reserve starts cutting rates decisively. The outlook for 2026 suggests a modest rebound—but trade policy under Trump could change the equation overnight. For anyone converting USD to CAD, the best time to act is when oil prices spike and the Fed signals a dovish turn.