Canadian Dollar Losses Value Against Major Currencies. Is a Correction on the Horizon?

The Canadian dollar (CAD) also known as the “loonie” has faced a considerable decline for the first half of 2025. The currency has done poorly compared to most major global currencies. This is mainly due to a soft Bank of Canada and lower commodity prices. We will take a look at the CAD’s depreciation in this article, with in-depth analysis of USD/CAD, GBP/CAD, and EUR/CAD.

As of May 2025, the Canadian dollar, commonly called the loonie, has seen a significant drop. It has lost more than 4.5 percent of its value compared to the U.S. dollar, often known as the greenback. Additionally, it has fallen by about 6 percent against the euro. It has experienced a more significant decline of over 7 percent compared to the British pound sterling. The notable drop in the value of the Canadian dollar results from several factors indicating broad economic weakness. Several factors are influencing the situation. These include ongoing challenges within the domestic economy. Additionally, the Bank of Canada has adopted a dovish approach. Furthermore, rival currencies are performing strongly in the global market. Furthermore, the unemployment rate in the region has escalated, now reaching 6.4 percent, which exacerbates the economic landscape. Compounding these issues, the country’s Gross Domestic Product (GDP) grew by only 0.3 percent in the first quarter of 2025. This indicates a slow economic recovery and raises concerns among both investors and policymakers.