Raevon Bourque

Global markets are wrapping up the week on a surprisingly positive note, with equity indices in Asia and Europe showing resilience and North America extending gains thanks to AI-tech momentum. But for currency watchers, the story is less about today’s moves and more about what lies ahead. The Canadian dollar, in particular, is hovering near four-month lows against the U.S. dollar, and the outlook hinges on central bank decisions, oil prices, and geopolitical risks that could shape trading into next week.

The Canadian dollar (CAD) is feeling the heat. Over the past two weeks, the loonie has slipped to a four-month low near 1.3940 per USD, posted its biggest weekly loss since February at 1.1%, and only managed a small rebound as exporters locked in favorable rates. Behind the moves is a mix of weak Canadian data, falling oil prices, and a strong U.S. dollar.
September’s S&P Global Manufacturing PMI came in at 47.7, well below the 50 threshold that signals expansion, showing that the slowdown in Canada’s economy is deepening. At the same time, crude oil — one of Canada’s most important exports — has been sliding, undercutting demand for the loonie. Meanwhile, U.S. yields remain firm and American economic data continues to outperform, drawing investors into the greenback and leaving CAD on the defensive.

The Canadian dollar is looking wobbly lately. While other G10 currencies are putting up a fight against the U.S. dollar, the loonie is slouched in the corner and clearly gasping for air.
Overall, USD/CAD has been grinding higher for some time now, and it’s now circling the 1.3890 level — a fresh monthly high. That’s the kind of number that makes anyone with U.S. travel plans or cross-border payments cringe.

After bobbing in a tight range near 1.38, USD/CAD finally broke above 1.3850 on Tuesday—it’s highest level in two weeks—as traders look ahead to U.S. inflation data.
So what’s going on? Let’s break it down.

After a rough day in global bond markets Tuesday—where investors sold off government debt, driving borrowing costs to levels not seen in decades and raising concerns that economic conditions may continue to deteriorate—markets calmed somewhat on Wednesday. That gave stock markets a chance to stabilize, with the Nasdaq in particular bouncing higher after Google’s parent company Alphabet dodged a potential breakup in a major antitrust case brought forward by the U.S. government.

The Canadian dollar, or loonie, has been anything but boring this year. As we roll into fall 2025, traders, businesses, and travelers all want to know: where’s the loonie going next?
The answer isn’t simple. Canada’s economy is showing both resilience and weakness. GDP contracted 1.6% annualized in the second quarter of 2025 as exports plunged and business investment fell, yet household spending and housing stayed firm. This push and pull means the loonie is unable to make any clear breakout moves. Still, it isn’t in free fall and is holding up better than expected.

After weakening on the release of some dismal jobs data last week, the Canadian dollar has regained a bit of strength and is back trading in the familiar 1.375 to 1.38 range. The modest rebound has more to do with broad U.S. dollar weakness than any real surge in Canadian dollar strength.

After spending most of the year coasting on the idea that the U.S. was in trouble — high debt, sticky inflation, and an aggressive tariff agenda — global investors are doing a full 180. The U.S. dollar is back in style, and the Canadian dollar is paying the price.

The Canadian dollar has recently shown signs of stabilizing—if not strengthening—trading just under 1.37 USD per CAD as of Monday morning. These are relatively high levels compared to the mid 1.40s seen in early 2025. The recent climb reflects broad U.S. dollar softness and cautiously optimistic global sentiment around trade and economic data.

The Canadian dollar is quietly climbing its way back up the charts, nudging USD/CAD below the 1.37 mark in early Tuesday trading, a move that underscores how external forces are shaping the currency pair this week. in early Tuesday trading. While economic data is thin, the drama unfolding in U.S. politics—and its impact on the U.S. dollar—continues to be the main event driving currency moves.