Canadian Dollar Weakens as US Dollar Strength Surges

The Canadian dollar has weakened significantly in recent months, trading as low as 70 cents on the US dollar. This is not far from its extreme lows during the COVID-19 pandemic and Tariff Day in 2026.

Initial thoughts suggested this was a Canada-specific issue, but further analysis reveals it's actually driven by US dollar strength. The Japanese yen has also weakened against the US dollar, reaching its lowest value since the early 1980s.

The recent appointment of Kevin Warsh as Federal Reserve Chair on May 22, 2026, has contributed to this surge in US dollar strength. With Warsh being an inflation hawk and emphasizing price stability, fears about Fed independence have dissipated for now.