Usdcad Long Term Forecast

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Usdcad Long Term Forecast

Usd/Cad Will Drop To 1.28 By The End 2026

According to Scotiabank, the USD/CAD pair will drop to around 1.28 by the end of the year 2026. That's a very bearish forecast from Scotiabank as the USD/CAD pair is still trading in the 1.37-1.39 range for now.

Scotiabank thinks there will be one more rate cut from the Bank of Canada. Meanwhile, the US Federal Reserve will roll out several rate cuts during the next year.

More Losses Ahead For Usd/Cad

So, all of this will further narrow the yield spreads and eventually result in gains for the Canadian Dollar. It's worth noting that a decline in the USD/CAD exchange rate means gains for the Canadian Dollar.

By the end of the year 2025, Scotiabank has forecasted a target of 1.34. As for the next year (2026), Scotiabank will drop even further and reach 1.28.

The bank also made it clear that the USD/CAD pair faces multiple headwinds. A key risk is the tariffs and all the uncertainty that comes with them.

Also, the tariffs will lead to higher inflation and might even further strain the relations between the US and Canada.

For now, the employment reports are weak, while the economic activities are also not that strong. All of that could force the BoC to go ahead with one more rate cut to balance things out.

Also, inflation will remain a big issue for both the USA and Canada. It might be more for the US citizens as tariffs will now also be a part of the equation.

And once more, rate cuts are rolled out, the inflation is expected to go even higher. In fact, there's a risk that we might enter into a new cycle of higher rates once again.

As for the US Federal Reserve, it will likely continue with the rate cuts even in the year 2026. Many think there will only be one more rate cut in 2026, but that's not the reality.

weaker economy and an even weaker labor market will be enough of a catalyst for the US Federal Reserve to roll out more rate cuts.

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