In recent weeks, the Canadian dollar has continued to collapse, making travel abroad more expensive than ever. With the return of Donald Trump to the presidency of the United States and his intention to impose customs tariffs of 25% as of February 1, Canadians find themselves faced with a surprising reality: traveling south of the border could soon to cost almost as much as a trip to Europe. This economic situation raises many concerns, while the weakness of the dollar weighs heavily on the portfolio.
Also read: The Canadian dollar risks collapsing even further in 2025 according to experts
When Donald Trump talked about imposing 25% tariffs on all Canadian and Mexican products exported to the United States last November, the Canadian dollar fell to 70.6 US cents. The last time the loonie was this low against the US dollar was in April 2020, at the very beginning of the COVID-19 pandemic.
However, the depreciation did not stop there. Since mid-December 2024, the value of the Canadian dollar has hovered below 70¢ US. As of January 21, 2025, it stood at USD 0.697582. Which means that to have one American dollar, you have to spend approximately $1.43 CAD.
Remember that fluctuations in the Canadian dollar can depend on many factors specific to each currency pair and each economy. This is why the rather tense trade relations currently between the United States and Canada may have a direct link to the fall of the loonie against the American dollar.
One thing is certain, it is that this amount is dangerously close to the exchange rate with the euro, a rate to which Canadian tourists are already accustomed.
-As of January 21, 2025, the exchange rate is 1 CAD = 0.66931 EUR. So you have to spend 149.40 CAD to reach 100 euros.
In their latest analysis of currency rates published on January 15, the economists at Mouvement Desjardins envisage an even more brutal fall in the loonie with the imposition of customs tariffs of 25% on Canadian products exported to the United States.
“If tariffs reach 25%, the Canadian dollar could plunge to between CA$1.52 and CA$1.55, the equivalent of 64 to 65 US cents,” warn Jimmy Jean, vice-president and chief economist, and Mirza Shaheryar Baig, currency strategist at Mouvement Desjardins.
You will therefore have to closely monitor market fluctuations between now and February 1 to know if it will be more economical for you to go to Disneyland Paris rather than Walt Disney World in Florida.
