The Canadian dollar (CAD) has been experiencing a rather subdued phase recently, largely due to a decline in oil prices, which significantly impacts this commodity-linked currency. As of October 19, 2025, oil prices have fallen to a five-month low amid global oversupply concerns and ongoing trade tensions between the U.S. and China. This dip has led to a corresponding weakening of the loonie, highlighting its close ties to the oil market.
Analysts note that CAD's stability against the U.S. dollar was briefly supported after Federal Reserve Chair Jerome Powell indicated potential future rate cuts, which weakened the U.S. dollar. However, uncertainty surrounding trade negotiations, particularly related to the U.S. and Canadian automotive and steel industries, has added to the downward pressure on the CAD. Recent forecasts suggest that the Canadian dollar could slide further if the upcoming October jobs report indicates a continuing cooling in the labor market.
Current exchange rates show the CAD to USD at 0.7117, which is 1.1% below its three-month average of 0.7193. It has operated within a narrow range of 0.7084 to 0.7279. Meanwhile, CAD to EUR is at 0.6152, slightly below its three-month average, and CAD to GBP has seen a mild increase to 0.5409, just 0.9% above its three-month average. The CAD is showing a stronger performance against the JPY, standing at 109.3—1.7% above its average.
The correlation with oil prices remains a critical factor, as commodities account for a significant portion of Canada's exports. Currently, the price of Brent Crude oil is at 63.63 USD, which is 3.4% below its three-month average of 65.86 and has exhibited a volatile 15.0% range from 60.96 to 70.13. With the ongoing fluctuations in oil prices and anticipated changes in monetary policy from the Bank of Canada, investors should stay vigilant regarding market trends and economic indicators. Overall, as experts forecast changes in the global economic outlook, the future trajectory of the CAD will hinge on both oil market developments and domestic economic signals.
