If CAD/USD Swings, This TFSA Strategy Still Works

CAD/USD swings can make a TFSA feel volatile, so the best plan is a core in CAD assets plus a USD-sensitive counterweight.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published February 6, 3:45 pm EST

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Key Points

Build a rules-based approach by contributing and rebalancing on schedule instead of trying to time the loonie.
Use a counterweight that earns from USD-priced markets so a weaker loonie can help, but don’t rely on currency alone.
Cameco can fit that sleeve because uranium is largely USD-priced and contracts add visibility, but execution risk remains.

The loonie can swing fast and make a Tax-Free Savings Account (TFSA) feel jumpy even when your stocks act calm. A stronger Canadian dollar can shrink the value of U.S. exposures. A weaker loonie can puff those same holdings up, then snap back. Before you chase the “right” exchange rate, focus on what you control. Match your holdings to where you spend, own companies that earn in different currencies, and hold long enough to outlast the noise. Overall, your TFSA plan should not rely on prediction. Build a portfolio that still makes sense if the CAD/USD rate moves 5% in either direction.

Canadian dollars in a magnifying glass — Source: Getty Images

The strategy

A strategy that works through currency swings starts with a core and a counterweight. Keep the core in Canadian-dollar assets that match your Canadian goals, like broad TSX exposure and a bit of cash. Then add a counterweight that can benefit when the loonie weakens, such as businesses that sell into global markets priced in U.S. dollars.

Next, build rules that keep you from meddling. Contribute on a schedule. Rebalance on a schedule. If the loonie strengthens and your U.S.-exposed sleeve shrinks, top it up. If the loonie weakens and that sleeve grows, trim it. This habit turns currency swings into a signal instead of a stress trigger.

Finally, pick exposures where currency helps but does not carry the whole thesis. Commodity-linked businesses often fit because many products price in U.S. dollars. A strong operator can earn U.S.-dollar revenue while paying many costs in Canadian dollars, which can support margins when CAD falls. You still need quality and contracts, because a currency tailwind cannot rescue sloppy execution.

Consider CCO

Cameco (TSX:CCO) offers an example of that counterweight. It operates in the nuclear fuel cycle, with uranium assets in Saskatchewan and a 49% stake in Westinghouse. Over the last year, the story stayed centred on the security of supply. Utilities keep signing long-term contracts, and governments keep framing nuclear as firm power for a grid that needs more electricity.

Cameco also dealt with operational headlines. In late August 2025, it warned about a production shortfall at McArthur River and Key Lake and pointed to planning and market purchases to meet deliveries. After the third quarter, it highlighted a strategic partnership with Brookfield and the U.S. government aimed at accelerating new Westinghouse reactor builds, with an aggregate investment value of at least US$80 billion. That mix shows the trade-off: execution risk today, plus a runway if new builds ramp.

Recent earnings show why the stock can move on timing. In the third quarter of 2025, Cameco reported revenue of $615 million and delivered adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $310 million, even as it posted a small net loss. Management also reported $779 million in cash and cash equivalents and $1 billion in total debt. The balance sheet gives it flexibility, but quarterly delivery schedules can still swing results and headlines.

Foolish takeaway

Looking ahead, Cameco’s contracted book gives the TFSA case some backbone. It said it had contracts in place for average annual deliveries of over 28 million pounds of U3O8 per year over the next five years, and it narrowed 2025 uranium sales and delivery guidance to 32 to 34 million pounds. That kind of visibility can matter more than the spot uranium chart.

So, could CCO be a buy if CAD/USD swings? It can, if you want a TFSA holding that benefits from U.S.-dollar uranium pricing and long-term nuclear demand, and if you can tolerate drawdowns when sentiment turns. It might not suit you if you need a bargain or a smooth ride. Use it as one sleeve in a balanced TFSA, rebalance with discipline, and let the loonie do its thing.