The Canadian dollar has been stuck in a rut, trading around the 71 cents U.S. mark for a couple of months since tumbling from a decade high in June of 73.7 cents U.S., but while you shouldn’t hold your breath for anything better in 2025, next year could be better, say currency experts.

“The Canadian dollar has been pulled lower by a combination of a renewed widening in U.S./Canada short-term rate differentials, ongoing trade uncertainty and a spike in market volatility through early November,” Shaun Osborne, chief currency strategist at

Scotiabank Global Economics and FX Strategy, said in a currency forecast note.

Some of those factors played out Thursday as the Canadian dollar fell on scaled-back calls for the United States

Federal Reserve to cut interest rates at its meeting on Dec. 10. The Fed has cut at each of its last two decisions, bringing the rate to four per cent, but that’s still higher than the

Bank of Canada ‘s current rate of 2.25 per cent, making the U.S. dollar more attractive to investors.

Scotiabank expects the Canadian dollar to remain range-bound at the 71 cents U.S. level in the fourth quarter, but its outlook shifts dramatically for 2026.

It expects the Canadian dollar to finish next year at 75 cents U.S., kicking off the first quarter at 72.5 cents before rising a cent per quarter against the greenback. In 2027, it sees the loonie rising to nearly 77 cents U.S. by year-end.

Other currency watchers also see better things for the Canadian dollar.

Canadian Imperial Bank of Commerce ‘s fixed income, currency and commodity team thinks the loonie will break out of its current range and end the fourth quarter at nearly 72.5 cents U.S., a significant increase from the current spot price, and hold there in the first quarter of 2026.

“The loonie has been pushed and pulled over the past few weeks but is likely to sustain some positive momentum in 2026,” CIBC said in its monthly currency strategy note.

Why are two banks relatively upbeat on the loonie after a dismal second half so far in 2025?

“The Bank of Canada’s October rate cut is, we believe, the last in the cycle,” Scotiabank said. “Monetary policy is at the lower end of the neutral range and policymakers have made it clear that rate cuts can only do so much to help the economy adjust to structural (trade) challenges.”

Meanwhile, rate cuts are coming for the greenback, “compressing the (U.S. dollar’s) yield advantage,” Scotiabank said. It is expecting 100-basis-points worth of cuts to bring the Fed rate to three per cent as the U.S. economy grapples with “contradictory signals,” including a roaring stock market, sluggish housing sector and scattershot consumer spending.

The Fed trimming interest rates will make the greenback less attractive to investors. On the plus side for Canada, Scotiabank said the $140 billion in new spending over the next five years as outlined in the

federal budget should support the Canadian economy . “Loose monetary policy and significant fiscal stimulus provided by the federal budget will help backstop Canadian growth,” Scotiabank said. “U.S./Canada interest rate differentials should narrow substantially through 2026 as the Fed eases further and we expect the (Bank of Canada) tightens policy late in the year. This should lift the (Canadian dollar).”

Of course, there are plenty of perils that the loonie will have to navigate. For example, CIBC appears less convinced about how much immediate stimulus Prime Minister

Mark Carney ‘s budget will supply. “The initial lift to growth from the federal budget is likely to be very modest, as the wave of capital spending it’s designed to stimulate will come with a considerable lag,” CIBC said. “But we should also see some lagged impacts from prior rate cuts.”

Interest rate cuts typically take six months to a year to work through the economy.

There are also tariffs to consider. “High uncertainty” remains for sectors hard hit by tariffs , including steel, aluminum, automotive and lumber, though there may be a chance for a tariff reduction on aluminum, CIBC said.

For the time being, the bank is assuming most Canadian exports to the U.S. will continue to enter the country tariff-free under the

Canada-U.S.-Mexico Agreement or because the U.S. Supreme Court rules the duties unconstitutional.

Scotiabank is making no assumptions on the tariff file. “We have to concede that trade policy risks are a clear and present danger for the (Canadian dollar) … in the coming year, however,” it said.

The Last Toy Stores

Have you noticed that your neighourhood Toys ‘R’ Us location has closed, or maybe that it’s up for sale? Well, the team at the Financial Post Western Bureau did, too. They’ve put together a five-part series called The Last Toy Stores exploring the changing landscape of toy retail in Canada as the country’s largest chain shrinks its footprint. You can read the first part, detailing the changes at Toys ‘R’ Us, here, and visit the series home page at Financialpost.com every day this week for a new instalment.

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Renting in Canada may no longer be a short-term, transitory phase before homeownership. The median renter in this country is now over 30 and some have children, according to a recent report, suggesting many Canadians are renting later into their lives. The Financial Post breaks down what the typical Canadian renter looks like and why lifelong renting could become a bigger phenomenon in a costly housing market. — Serah Louis, Financial Post

  • Release of the Bank of Canada’s Senior Loan Officer Survey
  • Today’s data: Canada retail sales for September, United States average hourly earnings for September, housing starts and building permits for September, advanced goods trade balance for September, wholesale inventories for August
  • Today’s earnings: Skechers USA Inc., WK Kellogg Co.
  • Trouble in paradise: Condo threat in wealthy Halifax enclave sparks feud among families of seafood empire
  • Advice from a Canadian billionaire: ‘If you have money, give it away’
  • U.S. oil companies, energy investors ‘looking at Canada again’ amid flurry of deals

Read the full story here. It’s been nearly six years since COVID benefits were introduced, yet cases continue to come before the courts involving taxpayers who, having received the benefits, are now being asked to repay them. Tax expert Jamie Golombek looks at a strange and sad case here and warns the same thing could happen to Old Age Security payments.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at

wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus, check out his

Financial Post on YouTube

mortgage rate page for Canada’s lowest national mortgage rates, updated daily. Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Gigi Suhanic, with additional reporting from Financial Post staff, Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report or a suggestion for this newsletter? Email us at

  • Posthaste: Why Canadian home prices may not have hit bottom yet
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