USD to CAD Forecast - July 2025

Key factors driving the market

Several major economic drivers are influencing the USD/CAD exchange rate this month:

Central bank policies

Monetary policy decisions on both sides of the border are creating diverging trends.

The U.S. Federal Reserve is expected to cut interest rates later in 2025 due to slow economic growth and low inflation.

Lower interest rates reduce returns for investors holding US dollars, making the currency less attractive and contributing to a weaker USD.

Also, the Bank of Canada is nearing the end of its rate-cutting cycle. This relative stability is helping to support the strength of the Canadian dollar.

Weak U.S. economic data

Recent economic data from the U.S. has been underwhelming.

Reports have shown job losses and slowing activity in the services sector. This has increased expectations of interest rate cuts, which adds further downward pressure on the dollar.

In contrast, the Canadian economy has performed relatively better, which strengthens the case for a stronger CAD.

Oil prices

Oil prices are a key factor for the Canadian economy.

As a major oil exporter, Canada tends to benefit from stable or rising crude oil prices.

Continued strength in oil markets helps support the Canadian dollar.

Technical picture: What the charts are telling us

For those watching price trends and patterns, here's what the technical analysis suggests:

• USD/CAD is currently trading near 1.36, the lowest level in eight months. This means 1 US dollar equals roughly 1.36 Canadian dollars (right now, 1 USD will get you 1.38195 CAD).

• The next key support level is 1.3500. If the rate drops below this level, it could signal further weakness, potentially moving toward 1.3400 or lower.

• Resistance is in the 1.3650 to 1.3750 range. A break above this range could suggest the beginning of a rebound.

• The overall trend remains downward unless strong economic data or policy changes support a US dollar recovery.

Is it a good time to convert USD to CAD?

Whether you're sending money from the U.S. to Canada or vice versa, the current trends can affect your transfer value.

Sending money from the U.S. to Canada

• You'll currently receive fewer Canadian dollars for each US dollar.

• If the USD weakens further, the value you get may decline even more.

If you send USD to Canada now, this is how much you will get:

Sending money from Canada to the U.S.

• The stronger Canadian dollar means your money goes further in the U.S.

• The Canadian dollar could strengthen a bit more if current trends persist.

Risks to watch

Several external risks could affect the exchange rate outlook and shift the trend unexpectedly:

• U.S. economic reports: A stronger-than-expected job market or inflation data could delay rate cuts and strengthen the US dollar.

• Oil prices: A sharp drop in oil prices could weaken the Canadian dollar.

• Federal Reserve policy: If the Fed surprises markets by slowing or pausing its rate-cut path, the USD may rebound temporarily.

Live USD to CAD exchange rates

Converting USD to CAD

If you are planning to send USD to Canada, you need to pick the right money transfer company to get the most CAD on the other end.

Depending on your needs, it's best to use one of the following companies in August:

*Based on our data of $7,000 transfer from the USA to Canada in August 2025. For other amounts, please run a live search to get the best exchange rate.

History of the USD to CAD

USD to CAD, also known as the loonie, is a popular forex pair because of the strong business relationship between the two countries.

They both are parts of the United States, Mexico, and Canada Agreement (USMCA), which replaced NAFTA in 2020. As a result, the two countries do goods trade every year.

The exchange rate is mostly affected by three main factors. First, the actions of the Federal Reserve and BoC. Historically, because of the role of the USD as the global currency reserve, the Fed has more weight compared to the BoC.

Second, the pair is also often impacted by the prices of crude oil. The US is the biggest oil producer while Canada is the fourth. However, in terms of exports, Canada exports most of its oil to the US. Therefore, higher oil prices have often resulted in a stronger Canadian dollar.

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