FX.co ★ Canadian Dollar Near 2-Month Low on US Tariff Hike

The Canadian dollar remained stable at approximately 1.38 per US dollar, lingering near its lowest level in two months. This follows President Trump's executive order, which increased tariffs on Canadian goods from 25% to 35%. These new tariffs apply to all products not included in the US-Mexico-Canada Agreement, which is set to commence today. Additionally, the White House introduced a 40% transshipment tariff on goods rerouted via third countries to sidestep these duties. This development has cast a shadow on the prospects for Canadian exports, potentially impacting the nation's economic performance since about 75% of Canada's exports are destined for the US. Adding to the downward pressure, the Bank of Canada maintained its benchmark interest rate at 2.75% earlier this week, emphasizing resilience within the domestic economy despite ongoing global trade tensions. However, Governor Tiff Macklem indicated that rate cuts remain a possibility should conditions necessitate them. The Canadian dollar is poised for its worst weekly loss since the end of February.