Full Breakdown
Currency Exchange Rate Forecasts: USD/CAD, USD/JPY, and NZD/USD
11/16/2025, 8:49:50 PM
USD/CAD Exchange Rate Outlook
The US Dollar to Canadian Dollar (USD/CAD) exchange rate was reported at approximately 1.4025, with Scotiabank forecasting a gradual decline in the pair over the next few years. The bank attributes the Canadian dollar's recent weakness to two interest rate cuts by the Bank of Canada in September and October 2025. With these cuts now in the past, Scotiabank believes Canadian policy is approaching a neutral stance, supported by fiscal measures from the Federal Budget that are expected to bolster domestic growth. The bank anticipates that the narrowing interest rate differential between the U.S. Federal Reserve and the Bank of Canada will lead to a lower USD/CAD rate, projecting it to reach around 1.33 by 2026 and potentially 1.30 by the end of 2027.
USD/JPY Exchange Rate Projections
The USD/JPY exchange rate recently surged to 154.04, briefly surpassing the 155.00 mark for the first time since January 2025. CIBC forecasts that the USD/JPY will reach 156 by the end of 2025, an increase from its previous estimate of 148. This bullish outlook is influenced by dovish comments from Japanese Prime Minister Takaichi and ongoing fiscal expansion, which has led to a more lenient stance on yen depreciation. The Bank of Japan is not expected to raise rates in December, with a potential hike only anticipated in January 2026, contingent on wage and inflation data. The Ministry of Finance has expressed concerns regarding rapid currency fluctuations but remains relaxed about gradual yen weakness, although intervention may occur if the USD/JPY approaches 158.
NZD/USD Forecast
The New Zealand Dollar (NZD) has remained stable, with ANZ projecting a gradual strengthening against the US Dollar (USD) into year-end. The bank's forecast of 0.62 for NZD/USD is supported by signs of improving domestic activity, seasonal export strength, and the belief that much of the negative news has already been factored into the market. ANZ emphasizes that risk-sensitive currencies like the NZD typically perform well late in the year, particularly alongside stronger global equity markets. Despite recent challenges, ANZ does not foresee significant downside for the NZD against the AUD, as the economic conditions in Australia and New Zealand are expected to remain relatively balanced.
Official Statements & Responses
Scotiabank's analysis indicates a structural shift favoring a stronger Canadian dollar, while CIBC's outlook on the USD/JPY reflects a cautious optimism amid potential intervention risks. ANZ's perspective on the NZD underscores a belief in the currency's resilience despite recent headwinds.
Criticism & Opposition
While the forecasts from Scotiabank, CIBC, and ANZ present a generally optimistic view for the Canadian and New Zealand dollars, there are concerns regarding the potential for unexpected economic data to disrupt these projections. The ongoing uncertainty surrounding U.S. inflation data and Federal Reserve policy could also impact these currency pairs.
Conflicting Reports & Gaps
There is a notable absence of U.S. inflation data due to the recent government shutdown, which may affect market sentiment and trading strategies. The lack of this critical information could lead to volatility in the currency markets as traders adjust their positions based on incomplete data.
Verbatim Quotes
- “Scotiabank remains bearish on USD/CAD, arguing that the structural drivers now favour a stronger Canadian dollar rather than sustained USD resilience.” — Scotiabank
- “The bank sees little prospect of a rate hike from the Bank of Japan (BoJ) in December, with the BoJ likely to remain dovish through early 2026.” — CIBC
- “The emergence of economic ‘green shoots’ and our ‘darkest before the dawn’ theme continue to frame our outlook,” — ANZ
