The Canadian dollar weakened to about 1.37 per US dollar, pulling back from a three‑month high as trade tensions between the US and Canada escalated following the collapse of negotiations. President Donald Trump’s 50% tariffs on a broad range of Canadian imports took effect on Saturday after last‑minute talks between the two countries failed.
The new duties are expected to hit roughly 5% of Canada’s annual exports to the US—around $20 billion—covering products such as hockey sticks, agricultural goods, wine, cement, clothing, furniture, cameras, and other consumer items. In response, Canadian Prime Minister Mark Carney announced that Canada will introduce retaliatory tariffs starting September 8.
Heightened geopolitical risks also weighed on risk appetite, with the US expected to unveil new sanctions on Iran later in the day. At the same time, markets are focused on upcoming remarks by Federal Reserve Chair Kevin Warsh in Jackson Hole this week for further signals on the trajectory of US interest rates.
