Canadian Dollar Recap: July 2026

How did the Canadian dollar perform in July 2026?

The Canadian dollar gained ground against the US dollar through July, though not in a straight line.

USD/CAD opened the month at 1.42076 on July 1, climbed to a monthly high of 1.42388 on July 6, then slid to a monthly low of 1.39916 on July 30 before closing at 1.40148 on July 31. The monthly average sat at 1.41113. Measured open to close, USD/CAD fell 1.36% over the month, meaning the Canadian dollar strengthened against the US dollar. That partially reversed June's roughly 3% USD/CAD rise, when the pair opened at 1.37976 and closed at 1.42070 (currencynews.co.uk).

That means anyone converting US dollars into Canadian dollars received slightly fewer Canadian dollars per US dollar by month-end than at the start of July. Read the other way, each Canadian dollar bought a little more US currency by month-end than it did on July 1.

Why did the loonie strengthen in July?

Three things moved together: the Bank of Canada held its policy rate steady, Canadian inflation eased, and oil prices dropped.

The Bank of Canada held its overnight rate at 2.25% at its July 15 announcement, citing May's inflation reading of 3.2% and a projected Q2 GDP pace of 2.5% (Bank of Canada, July 15, 2026). A held rate, rather than a cut, tends to support a currency by keeping the return on Canadian-dollar assets steady relative to other countries.

Days after that decision, Statistics Canada reported that June's Consumer Price Index rose 2.8% year over year, down from May's 3.2%. On an unadjusted basis, the CPI fell 0.4% month over month, the largest monthly decline since December 2024. On a seasonally adjusted basis, it fell 0.1%, the first such decline since April 2025. Both moves were driven mainly by a 10.2% monthly drop in gasoline prices, as diplomatic talks in the Middle East eased global oil costs (Statistics Canada, July 20, 2026).

Oil itself fell over the month: WTI crude averaged $84.81 per barrel in June and $80.46 per barrel in July, a decline of roughly 5.1% (FRED, Federal Reserve Bank of St. Louis, MCOILWTICO series). A falling oil price often weighs on the Canadian dollar, since Canada is a major oil exporter. This July, though, cooling inflation and a steady policy rate outweighed that drag.

The labour market added some context too. Statistics Canada's Labour Force Survey showed Canada's unemployment rate at 6.5% in June, down 0.1 percentage points from May, with employment up 18,000 (+0.1%) and average hourly wages up 3.3% year over year to $37.20 (Statistics Canada, July 10, 2026).

What did the Bank of Canada decide on July 15?

The Bank of Canada held its overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The Bank said the current policy rate "remains appropriate to sustain the economic recovery and bring inflation back to the 2% target," while acknowledging mixed conditions: GDP growth was projected at 2.5% for the second quarter, May's inflation had risen to 3.2% mainly on higher gasoline prices tied to the war in the Middle East, and the labour market stayed soft with unemployment at 6.5%. The Bank said it would continue to assess the economy and inflation outlook and adjust policy as needed (Bank of Canada, July 15, 2026).

Separately, Statistics Canada's own GDP data, released after the rate decision, showed the economy grew 0.3% month over month in May, with an advance estimate putting second-quarter growth at 0.8% overall (Statistics Canada, July 31, 2026). The Bank's 2.5% Q2 figure was its own projection made at the time of the July 15 decision, ahead of this later data. The two aren't the same number and shouldn't be read as confirming one another.

How did the Canadian dollar move against other major currencies?

Beyond the US dollar, the loonie's July averages against other major currencies were:

These are monthly averages, not single-day quotes, so they smooth out day-to-day swings. If you're exchanging euros, pounds, or another currency at Keyhan Exchange, the same-day posted rate will differ from these averages. Check the current rate before you come in.

What's the outlook for the Canadian dollar in August 2026?

Bank forecasts for the Canadian dollar diverge, which is worth knowing before putting weight on any single number.

MUFG Research's July 2026 monthly FX outlook, published after a June 30 spot close of 1.4200, forecasts USD/CAD at 1.4000 for the third quarter of 2026 and 1.3800 for the fourth quarter (MUFG Research, July 2026). TD Economics, in a forecast table dated June 2026, projects the Canadian dollar at roughly 0.73 USD for the third quarter and 0.74 USD for the fourth quarter, equivalent to a USD/CAD rate of about 1.37 and 1.35 (TD Economics, June 2026).

Both forecasts point toward a stronger loonie by year-end, but they disagree on how much and how fast. Forecasts are not guarantees, and this isn't financial advice. Treat them as a range of professional opinion, not a prediction of what will happen at the counter.

What does this mean if you're exchanging money in Rosemère, Laval, or Terrebonne?

• Buying US dollars with Canadian dollars: July's move works slightly in your favour compared to the start of the month. Each Canadian dollar buys a little more USD by month-end.
• Converting US dollars back into Canadian dollars: the opposite applies. Each US dollar buys slightly fewer Canadian dollars than it did on July 1.

Either way, the difference is modest for a typical travel-sized exchange and matters more the larger the amount.