CAD to USD: Exchange rate and influence on foreign trade

February 17, 2025, the U.S. Dollar to Canadian Dollar (USD/CAD) exchange rate has risen by about 4.42%. This means that the US Dollar has appreciated relative to the Canadian Dollar.
Historical Trend
Over the past few years, the Canadian Dollar has experienced significant volatility against the U.S. Dollar.In 2018, the USD/CAD exchange rate reached a high of $0.8157 in February, while on December 31, 2018, it fell to a low of $0.7328 USD. Moving into 2024, the Canadian dollar to U.S. dollar exchange rate reached a low of C$1.3432 on September 24, 2024 and a high of C$1.4543 on January 31, 2025.The CAD USD exchange rate has fluctuated over the years. During the month of February 2025, the Canadian Dollar to US Dollar exchange rate fluctuated between February 12 and February 14 with a high of C$1.433, and the Canadian Dollar to US Dollar exchange rate fell for a time.

According to market analysis, the exchange rate trend of the Canadian Dollar against the US Dollar in 2025 is likely to show a downward and then an upward trend. The CAD to USD exchange rate is expected to stabilize around 1.39 by the end of the year. Analysts point out that the Canadian dollar exchange rate is expected to receive some support as the Canadian economy is expected to gradually recover and the rate of interest rate cuts by the Bank of Canada is likely to slow down. Specifically for the quarterly forecasts, the most optimistic forecast for the first quarter of 2025 is 1.41, and the most pessimistic forecast is 1.323; the second quarter is 1.401 and 1.3053; the third quarter is 1.404 and 1.303; and the fourth quarter is 1.432 and 1.288.

 

You can search for real time exchange rate through XTransfer exchange rate platform to monitor the latest rate.

The exchange rate of the Canadian dollar against the U.S. dollar is influenced by a number of factors. 

First, economic indicators can directly affect the exchange rate. For examples, economic growth, inflation rates, and interest rate levels in Canada and the U.S. will cast influence on the rate. 

Second, Canada as an oil exporter, fluctuations in international oil prices have a significant impact on the Canadian dollar exchange rate. In addition, the monetary policies of the Bank of Canada and the Federal Reserve, and the international trade relations between the two countries will also have an impact on the exchange rate.

 

 

Changes in the exchange rate of the Canadian dollar against the U.S. dollar (CAD/USD) have a significant impact on foreign trade transactions between the two countries in a number of ways:

When the Canadian dollar appreciates (CAD/USD exchange rate rises), Canadian exports become more expensive in U.S. dollar terms, which may reduce their competitiveness in the U.S. market. For example, Canadian oil, lumber, and agricultural exports may be reduced as a result of a stronger Canadian dollar. On the contrary, if the CAD depreciates, US exports to Canada will have a higher cost when companies trade with CAD. This will affect U.S. exports to Canada. 

Exchange rate changes have a direct impact on the trade balance between the two countries. If the Canadian dollar depreciates, Canada's dollar earnings from exports increase, which may help improve Canada's trade surplus or reduce the deficit. Conversely, when the Canadian dollar appreciates, U.S. imports of Canadian goods become cheaper and may widen the U.S. trade deficit.

Fluctuations in the Canadian dollar can also affect investment decisions between the two countries. If the Canadian dollar appreciates, U.S. investors may be attracted into Canada, while a depreciating Canadian dollar may make U.S. investors more cautious. Exchange rate fluctuations may also lead to higher supply chain costs due to the high degree of economic integration between the two countries. For example, a stronger Canadian dollar could increase the cost of Canadian imports of parts and components from the United States.

 

Canada is a significant oil exporter. Its exchange rate floating is closely linked to oil prices. As a significant oil exporter, Canada's exchange rate is closely linked to oil prices. Higher oil prices usually lead to an appreciation of the Canadian dollar, especially since the United States is a major importer of Canadian oil. Exchange rate fluctuations also affect the economic restructuring of both countries. A depreciating Canadian dollar may prompt Canadian firms to increase exports to the U.S. market, while an appreciating Canadian dollar may prompt firms to shift to the domestic market.

 

It seems that changes in the exchange of the CAD to USD won't directly infuence the trade competitiveness and balance of trade between Canada and the U.S. But the changes may influence investment decisions, supply chain stability and trade policy. Since exchange rate fluctuations have far-reaching effects on foreign trade transactions, Canadian and U.S. businesses and policymakers need to pay close attention to exchange rate changes and take effective measures to address potential economic risks.

 

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