The relative response to the coronavirus pandemic of Canada and the US plus oil market volatility are affecting the USD to CAD exchange rate in 2020.
If risk sentiment continues to improve, the CAD is well placed to extend gains. In the longer term, there is a perception Canada will enjoy a renewed close trade relationship with the US, with Biden as US President.
The CAD has hit its highest level against the dollar in 2.5 years, driven by the Canadian employment report, which was stronger than expected sixth time in seven months in November. However, it is experiencing weakness against euro and pound. The currency could bounce between 1.25-1.30 US cents as markets respond to market sentiment and, to a lesser extent, Canadian economic data.
Note that forecasts and predictions for the USD/CAD exchange rate change all the time, affected by news events and relative sentiment towards the Canadian and US economies and this exchange rate is even more volatile than usual because of the uncertainties around the Coranavirus pandemic.
You can read about other USD exchange rate forecasts here USD Trends and Forecasts for 2020.
Whether the US dollar will rise or drop in the future versus the Canadian dollar is a difficult question and the answer really depends on many factors. The best way to consider the current USD-CAD relative value is to check the change in the exchange over a range of periods to the present day. The below table does this for periods going back 10 years.
08 Jan 2021
|0.4% ▲||1 Week|
16 Dec 2020
|0.1% ▼||30 Days|
17 Oct 2020
|3.5% ▼||90 Days|
16 Jan 2020
|2.3% ▼||1 Year|
17 Jan 2016
|12.6% ▼||5 Years|
18 Jan 2011
|28.7% ▲||10 Years|
USD/CAD 10 year historic rates & change to 15-Jan-2021 : 1.2737