Updated June 2021
Figure 1.8 shows the historical U.S./Canadian dollar exchange rates.
In 2020, the U.S./Canadian dollar exchange rate averaged US$0.75, about 1 per cent lower than in 2019.
With oil prices expected to increase over the forecast period, the exchange rate is projected to improve to US$0.79 in 2021 to 2022, and to US$0.80 from 2023 onwards.
The Canadian dollar depreciated 1.00 per cent relative to the U.S. dollar, from US$0.754 in 2019 to US$0.746 in 2020. The exchange rate dropped to low levels of US$0.71 to US$0.72 during the March to May period, and then gradually increased, reaching US$0.78 by December.
Forecast for 2021 to 2030
Both the Bank of Canada and the U.S. Federal Reserve are expected to keep interest rates at this low level throughout the forecast period, until 2023. Canada’s exchange rate is forecast to increase to US$0.79 in 2021, and to US$0.80 in 2023, a level assumed until 2030, and supported by forecast that commodity prices improve and stabilize.