May FX Roundup: A Month of Competing Forces for the Canadian Dollar May was a volatile month for foreign exchange markets, with USD/CAD pulled between competing forces rather than driven by one clear trend.

The main theme was uncertainty.

That uncertainty showed up in the conversations our Traders were having every day with clients trying to decide when to move funds. The most common question we heard in May was: “What’s the best time to exchange currency?”

The month began with USD/CAD trading near two-month lows in the mid-1.35s, supported by a softer U.S. dollar and stronger Canadian manufacturing data. But as May progressed, the pair climbed steadily into the high 1.37s and briefly tested the upper 1.38 range before easing back at month-end.

Geopolitical risk, particularly around the Strait of Hormuz and ongoing tensions in the Middle East, played a major role throughout the month. At times, market uncertainty supported the U.S. dollar through safe-haven demand. At the same time, higher oil prices helped support the Canadian dollar because of Canada’s position as a major crude exporter. This created a push-pull dynamic where both currencies had reasons to strengthen. Oil was one of the biggest market drivers. Crude prices moved sharply through the month as headlines shifted between escalation, ceasefire optimism, and renewed uncertainty. When oil rose, the Canadian dollar found support. When oil fell on hopes of a U.S.-Iran agreement or reduced supply risk, the loonie lost some of that support.

Inflation and central bank expectations were another major factor. U.S. inflation data came in hotter than expected in May, reinforcing expectations that the Federal Reserve may need to stay restrictive for longer. This helped support the U.S. dollar. In Canada, inflation was softer than expected, while GDP data later in the month disappointed, adding pressure to the Canadian outlook.

By the end of May, USD/CAD was still trading near elevated levels compared with the start of the month. The move reflected stronger U.S. dollar support, softer Canadian growth signals, and ongoing uncertainty around oil, inflation, and interest rates.

In market conditions like these, the conversation shifts less toward predicting huge spikes and more toward managing timing risk in a market that reacts quickly to interest rates, inflation data, oil prices, and geopolitical uncertainty.

Digital tools are making currency exchange more accessible than ever, but in volatile market conditions, having direct access to an experienced trader can still make a meaningful difference for clients managing large or recurring transactions where timing matters.

For businesses and individuals moving money across borders, the lesson from May is clear: waiting for the “perfect” exchange rate is risky in a market that can shift quickly on headlines. Planning ahead, watching key data releases, and speaking with a trader before making larger transactions can help reduce timing risk.

May was a reminder that exchange rates are now reacting to multiple global pressures at once, making flexibility and planning more important than trying to predict a single market move.

As June begins, markets will be watching Canadian employment data, U.S. payrolls, inflation signals, and any further developments tied to oil and geopolitical risk.

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