Canadian Dollar (CAD) Performance Against the US Dollar (USD) – January 2
to March 15, 2025
1. Exchange Rate Overview

January 2, 2025: 1 CAD = 0.6934 USD

March 15, 2025: 1 CAD = 0.6950 USD

Overall Trend: The CAD appreciated slightly against the USD, rising
by 0.23% over the period.

Range: The exchange rate fluctuated between 0.6854 (Feb 3) and 0.7055 (Feb
14), staying within a narrow band of 0.69–0.70 USD.
2. Key Factors Influencing CAD Performance
(A) Oil Price Volatility

Canada is a major oil exporter, and the CAD often correlates with crude
prices.

Early 2025: Oil prices remained relatively high, supporting the CAD.

March 2025: A pullback in oil prices (Brent crude at $80–85/barrel) limited
further CAD gains.
(B) US Economic Policy & USD Strength

The US economy showed resilience, but expectations of Fed rate cuts kept
the USD in check.

Trade tensions: Threats of US tariffs on Canadian goods under the Trump
administration added uncertainty, weighing on the CAD.
(C) Canada’s Domestic Economy

Weak GDP growth: Q3 2024 GDP grew at 1.0% (annualized), below
expectations.

High immigration: Population growth (+5.1% since 2022) supported demand
but led to rising unemployment and lower per-capita GDP.

Inflation & interest rates:

CPI remained below 3%, allowing the Bank of Canada (BoC) to cut
rates aggressively.

BoC rate cuts in 2024–2025:

2024 total cuts: 175 bps (policy rate fell to 3.25%).

January 2025: Another 25 bps cut (to 3.00%).

Market expectations: Further cuts in 2025 (possibly to 2.0–
2.5%).
(D) Market Sentiment & Risk Appetite

Risk-off periods favored the USD, limiting CAD gains.

Investor caution due to oil volatility and trade risks kept the CAD rangebound.
3. Conclusion
The CAD saw mild appreciation against the USD in early 2025, supported by stable
oil prices but constrained by:
✔ BoC rate cuts (widening US-Canada yield gap)
✔ Sluggish Canadian growth
✔ US trade policy uncertainty
✔ Oil price fluctuations
Outlook: If oil stabilizes and the BoC pauses rate cuts, the CAD may strengthen
further. However, trade risks and US monetary policy remain key drivers.
Sources
1. Exchange rate data: ExchangeRates.org.uk
2. Bank of Canada rate decisions: bankofcanada.ca
3. Economic analysis: Sina Finance (中金外汇)