Lately, as I’ve been watching the movement of USD/CAD, I’ve realized it’s important to understand why the Canadian exchange rate has been rising. These days, it feels more real that the exchange rate between the US dollar and the Canadian dollar isn’t just a number—it acts as an indicator for the entire North American economy.

Looking at the current situation, as of early February, USD/CAD was around 1.36897. This week’s return was about 1.14%, but from a long-term perspective, the weak trend is still being maintained. Technically, the market is in a neutral state, but moving average indicators show that bearish signals are dominant, and stochastic suggests the possibility of a short-term rebound. After combining the analysis materials, it seems that a technical rebound is possible in the short term, but the medium-term trend remains weak.

When I looked for the reasons behind the Canadian exchange rate rising, it turned out that the Federal Reserve and the Bank of Canada’s interest-rate policy had the biggest impact. When the Federal Reserve raises interest rates, the dollar strengthens and USD/CAD rises; if the Bank of Canada takes a more hawkish stance, the effect works in the opposite direction. In addition, Canada exports a lot of energy resources such as crude oil and natural gas, so fluctuations in oil prices directly affect the Canadian dollar. When oil prices rise, the Canadian dollar tends to strengthen, which leads to the exchange rate falling.

As for the 2026 outlook, multiple analysis institutions are generally expecting a bearish trend. They say it’s likely to drop an additional 3% over the next 3 months and trade in the 1.31 to 1.34 range. The area around 1.36 seems to be the support level, and the range between 1.37 and 1.41 looks like the resistance zone. In the first half of the year, going with a strategy centered on selling positions seems valid, and around July, using higher volatility appears to be an effective approach.

To sum up the reasons why the Canadian exchange rate has been rising, ultimately, the key factors are the US economic indicators and interest-rate policy, as well as commodity prices like oil. You should keep monitoring macroeconomic indicators such as employment data, the consumer price index, and GDP growth rates. When US Treasury yields rise or demand for safe-haven assets increases, the dollar strengthens; conversely, when risk-on sentiment rises, the dollar weakens—this pattern repeats.

Personally, I think it’s important to avoid excessive leverage and make good use of stop-loss and take-profit orders. Especially during periods with high volatility, you need to be more cautious. From a portfolio perspective, rather than focusing only on USD/CAD, it would be wiser to diversify investments across different assets such as cryptocurrencies, stocks, commodities, and bonds. If you mix assets that have a negative correlation with USD/CAD, when the exchange rate falls you can offset losses to some extent with gains from other assets.