Barclays
FX Outlook 2026: Navigating the Turn
LIVE28 November 2025USD bearish
Back to CurrenciesModerately Bearish
USD/CAD
Funder of choice on structural headwinds
BARC Forecast Path
Cross-Firm Forecast Comparison
Key Drivers
USMCA outcome
BoC rate path
Growth potential
Trade exposure
Oil prices
All Firm Targets (Dec '26)
JPMModerately Bearish1.42
BARCModerately Bearish1.36
GSModerately Bullish1.35
BofAModerately Bearish1.35
INGModerately Bullish1.34
MSModerately Bullish1.34
MUFGModerately Bullish1.34
DBModerately Bullish1.32
Key Issues for 2026
1.USMCA renegotiation risk is unique to CAD in G10
2.BoC deep cuts erode carry advantage
3.Lower potential growth trajectory than peers
4.Trade policy drag from ongoing sectoral tariffs
5.Preferred as funder for carry trades: sell CAD vs MXN, AUD, NOK
Analysis Summary
CAD faces headwinds from USMCA renegotiation risk, lower potential growth, and BoC's easing cycle. Only G10 currency with active trade policy drag. Prefer as a funder for carry trades. USD/CAD to drift lower on broad USD weakness but CAD underperforms crosses.