FX.co ★ Loonie Rises on Tariff Optimism

In March, the Canadian dollar rose above 1.43 per USD, achieving a one-month high, as investors responded positively to news that not all trade levies slated for implementation on April 2nd would be enforced. It is anticipated that some countries, including Canada, may be exempted. President Trump's consideration of a three-tiered tariff system with selective exemptions suggests Canada could be subject to the lowest tariff bracket, thereby protecting its exports and alleviating external pressures on the Loonie. This positive sentiment is further supported by favorable oil price trends. Given Canada's role as a major oil exporter, strong crude prices amid supply concerns have enhanced the currency's attractiveness. In addition, speculation that the Bank of Canada might be less inclined to implement further rate cuts—especially after an unexpectedly high CPI report for February—has increased the allure of Canadian assets.