About USD/CAD
The two currencies
The US dollar is issued by the Federal Reserve System. The Canadian dollar is issued by the Bank of Canada, which describes itself as "the country’s sole authority for issuing bank notes", responsible for their design, production and distribution, working to the mandate in its Act’s preamble: "to regulate credit and currency in the best interests of the economic life of the nation". Both are called dollars and both carry two minor units — CAD is numeric 124 and USD numeric 840 in ISO 4217 — which is exactly why amounts have to be labelled. An unlabelled "$500" is ambiguous on this pair in a way it is not on most others.
Why this pair gets converted
This is a trade and travel pair before it is a trading pair. Statistics Canada reported that the combined value of Canada’s goods imports and exports with the United States surpassed $1 trillion for a third consecutive year in 2024, with customs-basis exports to the United States of $596.2 billion. Direction of travel shifted in 2025: exports to the United States fell 5.8% and the share of Canada’s merchandise exports going there fell from 75.9% in 2024 to 71.7% in 2025, leaving a $81.6 billion merchandise surplus. People cross constantly — Statistics Canada recorded 39 million Canadian-resident trips to the United States and 23.4 million US-resident trips to Canada in 2024, with Canadian travel to the United States contracting 23.5% in 2025. The BIS put USD/CAD at 5.3% of global turnover in April 2025.
What moves it, mechanically
The Bank of Canada treats the float as part of the policy framework rather than an outcome of it: its framework "consists of two key components", the inflation-control target and the flexible exchange rate, and the floating dollar "permits the Bank to pursue an independent monetary policy". It names the drivers directly — demand for Canadian goods and services, interest rates relative to other countries, and raw materials prices, noting that when the price of raw materials falls the currency tends to drift downward, which makes other Canadian exports cheaper for foreign buyers. A former Deputy Governor put the mechanism this way: the flexible exchange rate does not absorb a commodity price shock so much as help the economy adjust to it by smoothing the change in relative prices. The Bank intervenes only on a discretionary basis in the most exceptional circumstances; it states the last time it intervened to affect movements in the Canadian dollar was September 1998.
Practical notes
The Bank of Canada publishes daily average exchange rates once each business day by 16:30 ET, built from mid-market quotes collected every minute from 08:00 to 16:00 ET, with the highest and lowest 2.5% of observations trimmed before averaging. It is unusually explicit about what that number is not: the rates are "indicative rates only", they "do not necessarily reflect the rates at which actual market transactions have been or could be conducted, and they may differ from the rates provided by financial institutions", and the Bank provides them "not as benchmarks for transactional purposes". One Canadian quirk worth knowing: since the withdrawal of the penny, cash payments in Canada round to the nearest five cents on the final total after tax, while non-cash payments continue to settle to the cent — so the two-decimal minor unit is fully in force for a card or transfer.
Frequently asked questions
What does USD/CAD mean?
It is the price of one US dollar expressed in Canadian dollars. Because both currencies are called dollars and both use a $ sign, amounts on this pair need their currency code stated — an unlabelled "$500" is ambiguous here in a way it is not on most other pairs.
Does the Bank of Canada intervene in the Canadian dollar?
Rarely, and it says so precisely. The Bank states that Canada’s policy is to intervene in foreign exchange markets on a discretionary rather than a systematic basis and only in the most exceptional of circumstances, and that the last time it intervened to affect movements in the Canadian dollar was September 1998.
Is the Bank of Canada’s daily exchange rate an official rate?
No. The Bank describes its rates as indicative only, derived from averages of aggregated price quotes from financial institutions, and states they do not necessarily reflect the rates at which actual market transactions have been or could be conducted and may differ from the rates provided by financial institutions. It provides them as a public good for statistical, analytical and informational purposes, not as benchmarks for transactional purposes.
How is the Bank of Canada’s daily rate calculated?
From mid-market quotes collected every minute between 08:00 and 16:00 ET — 480 observations — with the highest and lowest 2.5% removed and the remainder averaged. The result is published once each business day by 16:30 ET.
Does Canada still use cents?
Yes, for anything other than cash. After the penny was withdrawn, cash payments round to the nearest five cents, applied only to the final total after tax rather than to individual line items. Non-cash payments — cheques, credit and debit cards — continue to settle to the cent, so the Canadian dollar’s two-decimal minor unit remains fully in force for a card payment or transfer.