USD vs CAD: Historical Trends & What Drives the Loonie

CCW Editorial · 2026-03-05 · 6 min read

The Canadian dollar — affectionately called the 'loonie' — is one of the most commodity-sensitive currencies in the world. Here's what to watch.

Over the last decade, USD/CAD has bounced between roughly 1.20 and 1.46. That's a 20% swing — meaningful for cross-border shoppers, snowbirds, and remote workers paid in either currency.

Oil is the loonie's heartbeat

Canada is a major oil exporter. When crude prices rise, foreign buyers need more CAD to pay for Canadian oil — pushing the loonie up. When oil tanks (2014, 2020), so does the CAD.

Interest rate gap

When the Bank of Canada hikes faster than the Fed, capital flows north and CAD strengthens. The reverse is also true — and rate-decision weeks are the most volatile for USD/CAD.

Practical takeaway

If you regularly move money across the border, watching oil and central-bank schedules gives you a meaningful edge. Use the USD to CAD chart on our site to spot multi-month trends.

Interest rates on both sides of the border

The Bank of Canada and the US Federal Reserve set policy rates independently. When US rates are higher than Canadian rates, investors can earn more holding US dollar assets, which tends to support the US dollar against the loonie; when the gap narrows, the Canadian dollar usually benefits. Watch both banks' decision dates if you have a large conversion planned.

Trade ties

The United States is Canada's largest trading partner, so news about tariffs, trade agreements and cross-border demand can move USD/CAD quickly. Because so much Canadian trade is priced in US dollars, Canadian businesses often hedge, which adds to daily trading in the pair.

Converting between USD and CAD

For cross-border shoppers and snowbirds, the main cost is usually the card or bank margin rather than the day's rate. A card with no foreign transaction fee, or a provider that shows its margin, saves more than waiting for a better rate. The USD to CAD page shows the dated mid-market rate and a 30-day history chart.