Photo: Enoch Leung / Wikimedia Commons, CC BY-SA 2.0, cropped
The Loonie Just Hit an 18-Month Low. What a 70-Cent Dollar Means for Your US Stocks, Trips and Savings
- On October 5, 2026, it took C$1.4293 to buy one US dollar. That's the weakest loonie since April 2025.
- Put the other way, one Canadian dollar bought about 70 US cents.
- The slide ran from September 9 to October 5. The dollar has since steadied near C$1.42.
- The main cause: the US Federal Reserve raised rates while the Bank of Canada held at 2.25%.
- Canada lost 110,000 jobs in August and September combined, which adds to the pressure.
What happened
On Monday, October 5, it cost C$1.4293 to buy one US dollar. The Canadian dollar hadn't been that weak since April 2025.
Flip it around and one loonie bought about 70 US cents.
The drop took less than a month, from September 9 to October 5. Since then the currency has steadied, trading near C$1.42 this week.
Why the loonie is falling
1. The interest rate gap. This is the big one. In September, the US Federal Reserve raised its rate to a range of 3.75% to 4.00%. The Bank of Canada kept its rate at 2.25%.
Investors can now earn about 1.5 percentage points more by holding US dollars. So money moves south, and the Canadian dollar falls. The gap between two-year bond yields in the two countries is the widest since February 2025.
2. A weak job market. Canada lost 42,000 jobs in August and 68,000 more in September. A slowing economy makes a rate hike here less likely, which keeps the gap wide.
3. Tariffs. New US tariffs on some Canadian goods took effect August 22.
4. Nervous markets. When investors get worried, they buy US dollars. With bond markets under stress in Europe and oil swinging, that's been happening a lot.
High oil prices usually help the loonie because Canada exports oil. This time they haven't been enough.
Who wins and who loses
| Effect of a weaker loonie | |
|---|---|
| You own US stocks or unhedged US ETFs | Gain. They're worth more in Canadian dollars. |
| You're buying US stocks now | Lose. Each US dollar costs more. |
| You're travelling to the US | Lose. A US$1,000 trip costs about C$1,430. |
| You shop on US websites | Lose. Same reason. |
| Canadian exporters | Gain. Their goods get cheaper for US buyers. |
| Anyone buying imported food or goods | Lose. Prices rise over time. |
The part investors can control: fees
You can't control the exchange rate. You can control what your broker charges to convert.
Most Canadian brokers charge about 1.5% each time you swap Canadian dollars for US dollars. Buy a US stock and later sell it, and you've paid twice. On US$10,000, that's roughly US$300 gone.
Three ways to cut it:
- Keep a US-dollar account. Convert once, then buy and sell US stocks without converting again.
- Use a low-cost converter. Interactive Brokers charges a tiny fraction of a percent.
- Use Norbert's Gambit for larger amounts. See how it works.
Our full comparison is in the cheapest way to buy US stocks from Canada.
Should you hedge?
Some Canadian ETFs that hold US stocks are "CAD-hedged." They remove the currency effect. Hedged funds missed the boost from the loonie's fall. They'd come out ahead if the loonie climbs back.
Over long periods the difference tends to even out. See hedged vs unhedged ETFs.
What to watch
- October 19: Canada's September inflation report.
- October 28: the Bank of Canada and the Federal Reserve both announce rate decisions on the same day. If the Fed hikes again and Canada doesn't, the gap gets wider.
Frequently asked questions
How low is the Canadian dollar right now?
On October 5, 2026, one US dollar cost C$1.4293, the highest since April 2025. That means one Canadian dollar bought about 70 US cents. It has traded between about C$1.42 and C$1.43 since then.
Why is the Canadian dollar falling?
Mostly because of interest rates. The US Federal Reserve raised its rate in September to a range of 3.75% to 4.00%, while the Bank of Canada held at 2.25%. Money flows toward the currency that pays more. Weak Canadian job numbers and US tariffs add to the pressure.
Is a weak Canadian dollar good or bad for investors?
Both. If you already own US stocks or unhedged US ETFs, their value in Canadian dollars went up as the loonie fell. If you are buying US investments now, each US dollar costs you more.
Should I wait for the loonie to recover before buying US stocks?
Nobody can predict currency moves reliably. If you invest regularly, you will buy at many different exchange rates and they will average out. What you can control is the conversion fee, which is often 1.5% at Canadian brokers.
How can I avoid high currency conversion fees?
Hold US dollars in a US-dollar account so you convert only once, use a broker with low conversion costs such as Interactive Brokers, or use Norbert's Gambit to convert larger amounts for a few dollars in commissions.
Primary sources
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 9, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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