Canadian Dollar Plunges to 70 Cents Amid Strengthening US Currency
The Canadian dollar has dropped to 70 cents on the US dollar, nearing its extreme lows set during the COVID-19 pandemic and the Tariff Day. This decline was initially attributed to Canada-specific factors such as oil prices and gold values, but it appears that a stronger US dollar is the primary cause.
The Japanese yen has also pushed back up to 162, reaching its lowest value against the US dollar since the early 1980s. The euro has weakened as well. Since Kevin Warsh was confirmed as Federal Reserve Chair on May 22, 2026, the US dollar has strengthened broadly.
Experts point out that a stronger US dollar is not just a currency story but also affects global markets, including gold and cryptocurrencies. With the US economy experiencing positive GDP growth and low unemployment, the expectation for rate cuts has dissipated. The futures market now prices in no change or even one 25 basis point hike.
The widening of short-term yield spreads between the US and Canada has contributed to the Canadian dollar's decline. At 70 cents, investors may want to revisit their hedging approach to US-denominated assets.