If you’re standing at a border crossing in Niagara Falls or just staring at a checkout screen on a cross-border shopping site, you’ve probably asked the big question: what is the US dollar to the Canadian dollar right now?
As of mid-January 2026, the answer is hovering around 1.39.
Basically, that means for every 1 US dollar you’ve got, you’re getting about 1 dollar and 39 cents in Canadian currency. It sounds like a win for Americans heading north, but honestly, the "why" behind that number is a lot more chaotic than a simple exchange rate table suggests.
The loonie—Canada’s nickname for its dollar—has been through the ringer lately. We’ve seen it dip to five-week lows near 1.3920 just recently, only to fight its way back a tiny bit when oil prices decided to wake up. It’s a constant tug-of-war. You’ve got the heavyweights like the Federal Reserve in the US and the Bank of Canada (BoC) pulling on one side, and global oil markets pulling on the other.
The Oil Connection Nobody Talks About
Most people think exchange rates are just about "how well the country is doing." Kinda, but for Canada, it’s mostly about what’s coming out of the ground.
Canada is a massive oil exporter. When West Texas Intermediate (WTI) crude oil prices start sliding—like they did toward the $55 to $58 range earlier this month—the Canadian dollar usually goes down with the ship. It’s what experts call a "commodity currency."
When the world wants more oil, they need more Canadian dollars to buy it. Demand goes up. Value goes up. Simple.
But 2026 has been weird. We’ve had a "supply glut" (basically too much oil) because countries like the US and OPEC+ are pumping like crazy. Then you add in the geopolitical drama. One day, there’s news about Iran that spikes prices to $61, and the loonie gets a boost. The next day, tensions ease, and we’re back to the mid-50s. If you're trying to time a currency exchange, you're basically trying to predict the Middle East and global supply chains at the same time. Good luck with that.
Why the "Policy Gap" Is Messing With Your Wallet
The real secret to understanding what is the US dollar to the Canadian dollar isn't actually in the stores; it's in the boardrooms of central banks.
Right now, we are seeing a massive "policy divergence."
- The US Federal Reserve: They’ve been playing it tough. Even with some rate cuts in late 2025, they’ve hit a pause button because US inflation is being "sticky." It’s hanging around 2.8% to 3.0%. Because US interest rates are staying relatively high, global investors want to park their money in US bonds to get better returns. That keeps the US dollar strong.
- The Bank of Canada: They’re in a different boat. The Canadian economy hasn't been as "ripped" as the US one. The BoC has kept its key rate at 2.25%, which is lower than the US.
This creates a "yield gap." If you’re a big-shot investor with a billion dollars, are you going to put it in a Canadian account at 2.25% or a US account at nearly 4%? You pick the US. This constant flow of money into the US keeps the USD/CAD exchange rate high.
What Most People Get Wrong About 1.39
There’s a huge misconception that a "weak" Canadian dollar is always bad for Canada. Honestly, it’s a double-edged sword.
If you’re a Canadian filmmaker or a lumber exporter in British Columbia, you actually love a 1.39 exchange rate. Why? Because you pay your workers in "cheap" Canadian dollars but sell your products for "expensive" US dollars. It makes Canadian exports look like a bargain to the rest of the world.
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The downside? Anything imported gets way more expensive. That avocado you’re buying in Toronto in the middle of January? It was paid for in USD. Those electronics from south of the border? Same thing. This "imported inflation" is one reason why your grocery bill feels like a personal attack lately.
The CUSMA Factor
We also can't ignore the elephant in the room: trade negotiations. With the CUSMA (the new NAFTA) up for review, there’s a lot of "wait and see" energy in the markets. Traders hate uncertainty. Any hint that trade barriers might go up between the US and Canada usually sends the loonie into a tailspin.
Real-World Math: What You’ll Actually Pay
When you look up the rate on Google, you see the "mid-market rate." This is the "true" price banks use to trade with each other. You will almost never get this rate as an individual.
If the rate is 1.39, a typical bank or airport kiosk might charge you 1.44 to buy US dollars or only give you 1.34 if you’re selling them. They take a "spread"—basically a hidden fee.
Pro Tip: If you're traveling, avoid the currency exchange booths at the airport. They are notorious for having the worst spreads. You're better off using a credit card with no foreign transaction fees or a digital bank like Wise or Revolut that gives you closer to that 1.39 "real" rate.
Where Is the Rate Heading?
Predicting the future of what is the US dollar to the Canadian dollar is a fool’s errand, but we can look at the data.
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Some analysts, like those at Morningstar, think the loonie is actually "undervalued" right now. They expect it might strengthen toward the end of 2026 as the US Fed starts cutting rates more aggressively. If the US rates drop and Canadian rates stay steady or even go up (some people are whispering about a BoC hike in late 2026), the gap closes.
If that happens, we could see the rate move back down toward 1.35 or even 1.31. But that depends entirely on oil not staying in the gutter and trade talks staying civilized.
Actionable Steps for Your Money
- Wait for the Rebound (If You Can): If you're a Canadian planning a US trip and don't need the cash today, keep an eye on oil prices. A spike in WTI crude over $65 usually gives the loonie a 1-2 cent boost.
- Lock in Rates for Business: If you run a business that deals in USD, consider a "forward contract." This lets you lock in today’s 1.39 rate for a future payment, protecting you if the dollar slides to 1.45.
- Check Your Credit Card: Ensure your card doesn't charge a 2.5% foreign exchange fee on top of the exchange rate. Most "travel" cards waive this. On a $1,000 purchase, that's $25 saved just by using the right plastic.
- Monitor the Fed Meetings: The next Federal Reserve meeting on January 28th will be a big one. If they signal a "hold" on rates due to high inflation, expect the US dollar to stay king for a while longer.
The exchange rate isn't just a number on a screen; it's the pulse of the North American economy. Whether you're buying stocks or just buying socks, knowing that 1.39 is driven by oil and interest rate gaps helps you make a way smarter call on when to pull the trigger on your next transaction.