The current USD/CAD exchange rate sits at 1.00 U.S. dollar to 1.2275 Canadian dollars, nearly reaching the 1.2247 exchange rate all the way back in January 2018. The exchange rate inches closer to that mark as both the US and Canadian economy are starting to rebound from depressions brought on by coronavirus lockdowns and a virtual standstill in many markets throughout the last two years.

US Federal Reserve’s monetary policy is taking an outcome-based approach while the Bank of Canada has started to taper off its quantitative easing program. Both governments are working to push their economies to reopen as strong as possible in the wake of increased vaccinations and eased restrictions.

The Canadian dollar is climbing steadily, benefiting from US stimulus packages as well as rising oil prices. WTI oil saw a nearly $5 increase in the space of a week, with analysts from Goldman Sachs forecasting a further climb.

U.S. President Joe Biden promised a $1.8 trillion economic boost plan named “American Families Plan”.

Meanwhile the Federal Reserve has not changed its monetary policy or interest rates. There was speculation ahead of yesterday’s Federal Reserve meeting that some tapering would occur, but that didn’t happen. At the meeting, the economic outlook was said to be bright, with considerable risks being downgraded to the point where those risks are not considerable anymore. Federal Reserve Chairman Jerome Powell said now is not the time for tapering.

A recent Bank of Canada meeting helped boost the Canadian dollar by about 2.8% as the BoC stated that there was an earlier rise in domestic interest rates than was previously expected.