USD to CAD Exchange Rate: What’s Happening with Your Dollar Right Now

The US dollar to Canadian dollar exchange rate is something most Canadians watch pretty closely, especially if you’re planning a trip south or doing business with American companies. Right now, on September 12, 2025, you need about $1.38 Canadian to buy one US dollar. That’s a small bump up from yesterday, and it shows just how much our loonie moves around based on what’s happening in both countries.

USD to CAD Exchange Rate Trends (September 2024 — September 2025)

How Our Dollar is Doing Right Now

The Canadian dollar has had quite a bumpy ride through 2025. Over the past month, our dollar has gotten weaker by about 0.69%, and when you look at the whole year, it’s down nearly 2%. That means if you were planning that Florida vacation or thinking about buying something from the US, it’s costing you a bit more in Canadian dollars than it did last year.

Recently, the exchange rate has been bouncing between about $1.38 and $1.38 CAD for each US dollar. We’re getting close to some of the weakest levels we’ve seen since August, which has a lot of people wondering what’s going on with our currency. The truth is, our dollar is pretty sensitive to what’s happening both here at home and around the world.

Why Interest Rates Matter So Much

One of the biggest reasons the US dollar is stronger than ours right now comes down to interest rates. Think of it this way: if you could earn more money by putting your savings in an American bank versus a Canadian one, where would you put your money? Right now, the Bank of Canada has set interest rates at 2.75%, while the US Federal Reserve has theirs between 4.25% and 4.50%. That’s a pretty big difference — about 1.5 to 1.75 percentage points.

Bank of Canada vs Federal Reserve Interest Rate Comparison (2024–2025)

This gap has gotten much bigger since 2024. While the Americans have kept their rates high to fight inflation, our Bank of Canada has been cutting rates to help our economy grow. This makes US investments look more attractive, so money flows south, which weakens our dollar.

What’s Going On in Canada Right Now

Job Market Troubles

Canada’s job situation has been pretty rough lately, and that’s got everyone worried. In August 2025, we lost 66,000 jobs, and that came after losing 41,000 jobs in July. Losing jobs two months in a row isn’t something we see very often, and it’s pushed our unemployment rate up to 7.1% — the highest it’s been in nine years (not counting the pandemic).

Because of these job losses, most experts now think the Bank of Canada will cut interest rates again when they meet on September 17. There’s about a 90% chance they’ll drop rates by another 0.25%. Just a few months ago, people thought there was only a 40% chance of this happening, which shows how quickly things can change.

Housing Market Challenges

Our housing market is another big piece of the puzzle. The Canada Mortgage and Housing Corporation says that housing starts in our seven biggest cities are expected to drop compared to 2024. This is happening even though the first half of the year looked pretty steady.

The problem is that it’s getting more expensive to build homes because of higher costs for materials and labor, plus all the extra fees developers have to pay. Toronto is looking at its lowest number of new housing starts in 30 years, and Vancouver isn’t doing much better. When the housing market struggles, it affects how confident people feel about spending money, which ultimately impacts our dollar.

How Strong is Our Banking System?

The good news is that Canadian banks are still in pretty good shape. According to the Bank of Canada’s latest report, our banks have plenty of money set aside for potential problems and are keeping good cash reserves. They’re also able to borrow money when they need to without too much trouble.

But there’s a catch — all the uncertainty about trade wars and what the US might do next has made markets much more volatile since the beginning of 2025. This uncertainty makes everyone more nervous about taking risks, including our banks and investors.

What Experts Think Will Happen Next

Short-Term Predictions

The big Canadian banks — RBC, TD, BMO, Scotiabank, and CIBC — think our dollar might get a bit stronger by the end of 2025. They’re predicting the exchange rate might improve to around $1.35 Canadian for each US dollar by December, and maybe get to $1.33 by 2026. That would mean our dollar gets a bit stronger, which would be good news if you’re planning to shop in the US or travel there.

Other forecasters are a bit less optimistic in the short term. Some think we might see the rate hit $1.39 by the end of September and possibly $1.40 within a year. These predictions take into account what’s happening with our economy, what central banks might do with interest rates, and how our currencies have moved in the past.

What Could Change Things

Several things could make our dollar stronger or weaker over the next while:

Interest Rate Changes: If the US Federal Reserve starts cutting their rates while our Bank of Canada slows down on cuts, the gap between the two countries’ rates would get smaller. This could help our dollar.

Oil Prices: Since Canada sells a lot of oil, when oil prices go up, our dollar usually gets stronger too. What happens with oil supply and demand around the world will keep affecting our currency.

Trade Issues: If the trade tensions between the US and other countries (including Canada) get sorted out, that would probably help our dollar. Less uncertainty usually means investors are more willing to put money into Canadian investments.

Looking Further Ahead

Over the longer term, how well our dollar does will depend on some big structural things about our economy. We depend a lot on selling natural resources like oil, lumber, and minerals to other countries, which makes our currency go up and down with commodity prices.

The good news is that Canada is in pretty good financial shape compared to many other developed countries. Our government debt levels are manageable, and we have strong institutions that people trust. This gives our currency some underlying support, even when there’s short-term volatility.

Getting Better Exchange Rates for Your Money

How Interchange Financial Helps Canadians

When you need to exchange Canadian dollars for US dollars, you don’t have to stick with your bank. Companies like Interchange Financial have been helping Canadians get better deals on currency exchange for almost 20 years. They started in Toronto and realized that regular banks weren’t giving Canadians the best possible rates.

Here’s what makes them different: they don’t charge fees for currency exchange, and they’re upfront about their rates. Most of the time, you’ll get somewhere between 1% to 3% better rates than what your bank offers. That might not sound like much, but if you’re exchanging a few thousand dollars for a big purchase or vacation, those savings add up quickly.

Interchange Financial has five locations around the Greater Toronto Area, but they also work with customers across Canada through their website. They handle over 70 different currencies, so whether you need US dollars, Euros, or something more exotic, they can probably help.

What Customers Like About Their Service

People who use Interchange Financial often mention a few things they really appreciate:

Clear Pricing: You can see exactly what rate you’ll get before you make any commitment. There are no surprises or hidden fees that show up later.

No Extra Charges: Unlike many banks that charge service fees on top of poor exchange rates, Interchange Financial doesn’t add any extra fees. What you see is what you get.

Buyback Promise: If you don’t use all your US cash, they’ll buy back up to half of it at the same rate you originally got. This takes away the worry about being stuck with leftover foreign money.

Convenient Hours: Their stores stay open longer than most bank branches, making it easier to get your currency exchange done when it works for your schedule.

Things to Watch Out For

Economic Risks

There are several things that could make our dollar weaker in the coming months. Canada’s economy actually shrank in the second quarter of 2025, mainly because we exported less and businesses invested less money. This shows how sensitive our economy is to what’s happening around the world.

Also, about 40% of the debt that Canadian companies owe is in foreign currencies. This means that if our dollar gets weaker, it becomes more expensive for these companies to pay back their loans, which could create more problems down the road.

Global Uncertainty

What’s happening in global markets also affects our currency. The ongoing uncertainty about trade wars has made all financial markets more volatile, and nobody really knows what US trade policy will look like from month to month. This makes it harder to predict where currencies will go and means more ups and downs for people exchanging money.

The fact that Canada and the US economies are performing differently also matters. While both countries have challenges, how they compare to each other affects where investors want to put their money, which ultimately influences exchange rates.

Bottom Line

Looking ahead to the rest of 2025 and into 2026, the Canadian dollar’s performance will depend on a mix of what our central banks do with interest rates, how well our economies perform, and what happens with global trade issues. While there might be some continued weakness in the short term because of interest rate differences and economic uncertainty, the longer-term picture could be more positive as these issues get sorted out.

If you need to exchange Canadian dollars for US dollars, it’s worth shopping around for better rates than what your bank offers. Companies like Interchange Financial can save you money with better exchange rates and no hidden fees — savings that can really add up on larger transactions.

The path forward for our dollar will largely depend on resolving current uncertainties, what happens with central bank policies, and broader global market conditions. While we’ll probably see continued volatility in the short term, both the Canadian and US economies are fundamentally strong, and our countries do so much business together that things should eventually stabilize into more predictable patterns.

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