As of early Monday, the storm was 450 kilometres north of San Juan, Puerto Rico and had winds of 110 km/h as it moved north-northwest at 17 km/h.
Sustained winds were approaching hurricane status (119 km/h) and Rafael will likely be upgraded to a Category One storm during the day, forecasters said.
The Canadian Hurricane Centre says it's too early to say how the storm could impact Atlantic Canada.
Forecasters with the hurricane centre in Halifax say they are also monitoring the storm's development.
Computer models suggest a range of tracks, from just east of Cape Breton to well offshore southeast of Newfoundland either Wednesday or Thursday.
The centre says Rafael will most likely transition into a post-tropical storm with high winds and heavy rain as it nears the region.
The U.S. National Hurricane Center says the storm is not expected to make landfall in Newfoundland.
In the meantime, the Leeward Islands of the Lesser Antilles will get heavy rain Monday, while tropical storm force winds will lash Bermuda on Tuesday.
Elsewhere, Hurricane Paul has formed in the Pacific off Mexico's coast and a tropical storm watch has been issued for a portion of Baja California.
Paul is strengthening and maximum sustained winds on Monday were clocked at 130 km/h. Some additional strengthening is forecast during the day but the U.S. National Hurricane Center says weakening is expected to begin by Tuesday.
The hurricane was centred about 850 kilometres southwest of the tip of the Baja California peninsula and was moving north at 15 km/h.