If you talk to any Canadian dollar experts (don’t look at us!) these days, you’ll probably get the same look you get if your kid graduated from university… and then…
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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.
The Canadian dollar is on its back foot today, with the USD/CAD pair climbing to around 1.3750—a level we haven’t seen in nearly three weeks.
It was a bit of a tug-of-war for the Canadian dollar on Tuesday. After briefly flexing some strength against the US dollar, the Canadian dollar gave back its gains, settling right where it started. Flat might not sound dramatic—but behind the scenes, there’s a storm of global uncertainty keeping traders on edge.
Global Tensions Are Lifting the U.S. Dollar
Over the weekend, the U.S. deepened its involvement in the Israel-Iran conflict, launching airstrikes on nuclear sites in Iran. That move turned up the geopolitical heat and sent markets into risk-off mode. One of the big concerns? Iran’s parliament is backing the idea of blocking the Strait of Hormuz—a vital artery for the world’s oil supply.
In response, investors have started to move toward safety, and the U.S. dollar has been the main beneficiary. It’s now trading at its highest level in a month, with USD/CAD climbing to around 1.38 and holding its gains for five straight sessions
The Canadian dollar is catching its breath this week after a sharp multi-month climb. After gaining nearly 10 cents since early February, the USD/CAD pair is now drifting around the 1.3575 mark—stuck in limbo as traders await the next big move from the U.S. Federal Reserve and keep one eye on rising tensions in the Middle East.
The Canadian dollar hit a six-month high of 1.3700 on Monday, June 2nd, but was slightly down on Tuesday morning at around 1.3730. Overall, the Canadian dollar is expected to remain relatively stable and potentially eke out additional gains against the U.S. dollar over the summer months.
If the U.S. dollar were breaking up with the Canadian dollar, it would use the oldest cliché in the book: “It’s not you, it’s me.” That’s because the loonie’s recent strength has little to do with Canada’s economic brilliance—and everything to do with the U.S. dollar stumbling under the weight of its own problems.