If you’re looking at the exchange rate us to canadian dollars today, you've probably noticed that the numbers feel a bit like they’re stuck in mud. As of Saturday, January 17, 2026, the rate is hovering right around 1.3924. It’s been a weird week. One day the US dollar looks like it’s going to run away with it, and the next, the Canadian loonie claws its way back.
Honestly, it’s a classic tug-of-war. On one side, you’ve got a US economy that just won’t quit, even with all the talk about potential shifts at the Federal Reserve. On the other side, Canada is getting a much-needed boost from a spike in oil prices caused by some pretty intense geopolitical drama overseas.
If you're planning a trip across the border or trying to time a business payment, this 1.39 level is the "line in the sand" everyone is watching.
The real reason the US dollar is staying so strong
It’s easy to think the US dollar should be cooling off by now, especially since we’re well into 2026. But the data says otherwise. This week, we saw US jobless claims dip to 198,000. That’s low. It basically tells the market that the American labor market is still incredibly resilient.
When people have jobs and keep spending, the Federal Reserve doesn't feel much pressure to slash interest rates. Right now, the Fed’s target range is sitting at 3.5% to 3.75%. Compared to other major countries, that’s actually quite high. This makes the "greenback" a very attractive place for global investors to park their cash, which keeps the exchange rate tilted in favor of the US.
There’s also the "safe haven" factor. With the recent tension involving Ukraine and Russian oil tankers, plus some renewed friction in the Middle East, investors tend to get nervous. When the world feels unstable, everyone buys US dollars. It’s the financial equivalent of a security blanket.
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Canada's secret weapon: The oil rebound
So, why isn't the loonie crashing? One word: Oil.
Canada is a massive exporter of crude. When the price of West Texas Intermediate (WTI) jumps—which it did recently, hitting around $62 a barrel—the Canadian dollar usually follows. We’ve seen a five-day rally in oil prices because of those supply concerns in Europe and Iran.
Without this "black gold" support, we’d likely be seeing an exchange rate us to canadian dollars today well above 1.40. The energy sector is basically acting as a floor for the loonie, preventing a total slide even while the Bank of Canada keeps its own rates steady at 2.25%.
What the experts are actually worried about
If you talk to the analysts at banks like Scotiabank or BMO, they aren't just looking at today's ticker. They’re looking at the "interest rate differential." That’s a fancy way of saying the gap between what you earn on a US bond versus a Canadian one.
Right now, that gap is pretty wide.
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- US Fed Rate: 3.5% – 3.75%
- Bank of Canada Rate: 2.25%
That 1.5% difference is a huge deal. It’s like a magnet pulling money toward the US. However, some experts, like Sarah Ying over at CIBC, think the loonie could actually strengthen later this year. Why? Because if the US economy finally starts to slow down and the Fed cuts more aggressively than the Bank of Canada, the gap narrows. Some are even forecasting the rate to hit 1.35 or even 1.31 by the end of December.
But—and this is a big "but"—that depends entirely on oil staying expensive and trade relations staying smooth.
The "Trump Effect" and trade uncertainty
We can't talk about the Canadian dollar without mentioning the USMCA. The trade agreement is up for some serious talk this year. There’s been a lot of noise about the US moving toward more nationalist trade policies.
Interestingly, we’ve seen Canada’s Mark Carney looking toward China to build some trade bridges. This kind of "plan B" strategy usually makes currency traders a little twitchy. If the market thinks Canada’s relationship with its biggest trading partner (the US) is getting rocky, the loonie takes a hit.
Practical moves you should make right now
Waiting for the "perfect" rate is usually a losing game. It's like trying to catch a falling knife. But there are a few things you can actually do if you're dealing with the exchange rate us to canadian dollars today.
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If you are a Canadian business importing goods from the US, you might want to look at "forward contracts." This basically lets you lock in today's rate for a payment you have to make in three months. If the rate jumps to 1.42 in March, you’re protected.
For travelers, if you see the rate dip toward 1.38, that’s generally considered a "buy" signal in the current climate. We haven't seen much lower than that lately, so grabbing some cash when it's in the 1.38 range is a solid move.
Actionable takeaways for your wallet:
- Watch the $60 oil mark: If WTI crude oil drops back into the $50s, expect the Canadian dollar to weaken immediately.
- Keep an eye on January 28: That’s when both the Fed and the Bank of Canada have their next big meetings. If one side surprises the market with a "hawkish" tone (meaning they might raise or hold rates longer), the exchange rate will swing wildly.
- Don't ignore the spread: As long as US interest rates are significantly higher than Canada's, the US dollar will remain the "expensive" currency.
- Diversify your holdings: If you’re an investor, having a mix of both currencies can help hedge against the volatility we're seeing.
The reality is that the exchange rate is a mirror of two very different economies. One is a powerhouse driven by tech and high interest rates; the other is a resource-rich nation trying to balance growth with a cooling inflation rate of 2.8%. For now, expect the 1.38 to 1.40 range to be the "new normal" for a while.
To stay ahead of the next big move, focus on the US inflation prints coming out next month. If inflation stays "sticky" around 3%, the Fed won't cut, and your US dollars will keep their premium.