FX.co ★ Canadian Dollar Near 4-Month High

The Canadian dollar advanced towards the $1.41 mark, nearing its recent four-month high on April 3rd, as market participants evaluate Canada's relative insulation from stringent new U.S. tariffs. The indication that Canada will largely avoid the expanded duties outlined in the USMCA has helped to ease trade-related anxieties. Meanwhile, ongoing global tariff negotiations maintain a supportive influence. Although President Trump has rejected the notion of halting tariffs and expressed readiness to engage in further negotiations—an effort backed by outreach from approximately 70 countries—he has also issued a warning of imposing an additional 50% tariff on China unless it retracts its levies, a threat China has condemned as "blackmail," pledging to "fight to the end." Domestically, business confidence within Canada remains strong, as demonstrated by the Ivey PMI persistently remaining above 50. Nonetheless, persistent concerns in critical sectors such as automotive, steel, and aluminum, alongside uncertainties regarding the broader economic prospect and political risks in the lead-up to the snap election on April 28th, continue to present challenges.