5-Bank Canadian Dollar Forecast - January 2026
Written by Michael WattStay informed with the latest CAD forecasts and exchange rate insights from Canada’s top financial institutions. This page brings you updated USD to CAD forecast, EUR to CAD forecast and GBP to CAD forecast every month. Whether you're managing international business payments, converting funds for global investments, or simply tracking currency movements, these FX forecasts provide valuable guidance.
The Canadian dollar forecast from multiple banks helps you assess the Canadian dollar trend. Will the Canadian dollar go up or struggle to find demand? All your questions answered based on market trends, historical performance and current global conditions. Use this data to identify potential currency risks, understand how the exchange rate impacts your decisions, unlock better timing for your transfers and optimize your foreign exchange strategy.
Canadian Dollar Forecast - January 2026
The Canadian dollar enters 2026 trading with modest downward pressure after a period of relative stability. Domestic data points to a cautious economic backdrop, with inflation moderating toward the target and the Bank of Canada holding a neutral policy stance. While near-term volatility could persist due to external developments, Canadian banks broadly anticipate the Canadian dollar will gradually strengthen through 2026, supported by narrowing yield differentials and balanced commodity prices. Businesses and corporate treasurers should consider locking in hedges when the Canadian dollar approaches key technical levels that align with their payment and receivable timelines.
Canadian banks remain cautiously optimistic on the gradual strengthening of the Canadian dollar through 2026, subject to:
- Stable monetary policy expectations with the Bank of Canada on hold
- Narrowing interest-rate differentials with major economies
- Supportive commodity price levels
- Range-bound risk environment
While near-term pressures persist, the overarching outlook points to orderly FX adjustments rather than abrupt shifts. Corporations should evaluate hedging strategies against anticipated tightening cycles and rate expectations to secure future cash flows with minimized volatility risk
CAD Forecast Snapshot
| Pair | Current Range | 2026 January Forecast |
|---|---|---|
| USD/CAD | 1.37 – 1.41 | ~1.36 |
| EUR/CAD | 1.59 – 1.65 | ~1.61 |
| GBP/CAD | 1.83 – 1.88 | ~1.84 |
USD/CAD Forecast - January 2026
The USD/CAD pair is expected to remain range-bound in the first quarter, with most forecasts consolidating around the mid-1.38s. As the year progresses, the Canadian dollar is forecast to strengthen gradually if yield spreads tighten and economic data align with central bank expectations. Corporate hedgers might view rallies toward the mid-1.30s as opportunities to initiate forward contracts or options to protect future cash flows.
USD/CAD Forecasts - January 2026
| Bank | Spot (Jan 2026) | Q1 2026 (forecast) | Q2 2026 (forecast) | Q3 2026 (forecast) |
|---|---|---|---|---|
| RBC | 1.38 | 1.37 | 1.36 | 1.35 |
| CIBC | 1.38 | 1.39 | 1.38 | 1.37 |
| Desj. | 1.38 | 1.36 | 1.35 | 1.34 |
| TD | 1.38 | 1.38 | 1.37 | 1.36 |
| BMO | 1.38 | 1.38 | 1.37 | 1.36 |
| Average | 1.38 | 1.38 | 1.37 | 1.36 |
EUR/CAD Forecast - January 2026
The euro shows relative strength against the Canadian dollar in early 2026, largely driven by broader European macro performance and modest CAD pressures. As the year unfolds and Canadian macro indicators firm, banks anticipate a gradual adjustment lower for EUR/CAD. Corporate treasurers with euro-denominated obligations should monitor trend persistence around these levels for strategic hedging execution.
EUR/CAD Forecasts - January 2026
| Bank | Spot (Jan 2026) | Q1 2026 (forecast) | Q2 2026 (forecast) | Q3 2026 (forecast) |
|---|---|---|---|---|
| RBC | 1.61 | 1.60 | 1.59 | 1.58 |
| CIBC | 1.61 | 1.62 | 1.61 | 1.60 |
| Desj. | 1.61 | 1.59 | 1.58 | 1.57 |
| TD | 1.61 | 1.60 | 1.59 | 1.58 |
| BMO | 1.61 | 1.60 | 1.59 | 1.58 |
| Average | 1.61 | 1.60 | 1.59 | 1.58 |
GBP/CAD Forecast - January 2026
GBP/CAD reflects the relative strength of the British pound alongside the expected gradual appreciation of the Canadian dollar. Most forecasts indicate a controlled downward drift for this pair through the year. Market participants with GBP exposures should balance hedging horizons with their outlook on UK economic data and relative monetary policy trends
GBP/CAD Forecasts - January 2026
| Bank | Spot (Jan 2026) | Q1 2026 (forecast) | Q2 2026 (forecast) | Q3 2026 (forecast) |
|---|---|---|---|---|
| RBC | 1.84 | 1.83 | 1.82 | 1.81 |
| CIBC | 1.84 | 1.85 | 1.84 | 1.83 |
| Desj. | 1.84 | 1.82 | 1.81 | 1.80 |
| TD | 1.84 | 1.83 | 1.82 | 1.81 |
| BMO | 1.84 | 1.83 | 1.82 | 1.81 |
| Average | 1.84 | 1.83 | 1.82 | 1.81 |
Written by
Michael Watt
Foreign Exchange SpecialistMichael Watt is a Senior Corporate FX Specialist at MTFX, supporting Canadian businesses with strategic foreign exchange solutions and efficient cross-border payment workflows. With extensive experience in global financial services and client advisory roles, he helps companies improve international payment efficiency, reduce FX costs, and navigate currency market volatility. Michael brings a strong background in relationship management, business development, and international finance.
