Canadian Dollar: Feeling the Pressure from the US
What’s Heating Up the FX Market
The Loonie has been on a downward slide against the US Dollar, and it’s not just because of Canadian headlines. A few things over in the States have been throwing a wrench into Canadian currency plans.
- Massive Tax‑Cut Bill – Yesterday the U.S. House of Representatives approved a $4.5 trillion tax‑cut package championed by former President Trump. The deal is expected to fuel the American economy, making U.S. businesses look pretty shiny and potentially pulling capital away from Canada and even Mexico.
- New Copper Tariffs – Trump’s latest bite is to slap tariffs on copper imports. Even though Canada had a postponed tariff for a month, the risk of protectionist moves keeps trade fans on edge. These shifts can send vol‑waves through markets and give the dollar a little extra power.
- Inflation Sparks – If these tariff moves go through, Canada might feel a bumpy ride on the inflation front. A rising price ceiling dents growth prospects and makes the Loonie look less appealing to investors.
Inside Canada: Small Business Boosts, Big Signals
On the home front, early wholesale data knocked up a 1.8 % rise in January. That’s good news, but it’s not enough to wipe out the global vibes if the rest of the economic indicators are weak. Investors are holding their breath for this week’s GDP numbers – a strong click could lift the currency just a smidge, while a poor show would confirm the Loonie’s slump.
TL;DR – Loonie Outlook
The Canadian Dollar is under bearish trends, mainly driven by U.S. tax cuts and copper tariffs. Domestic gains are modest, and the market is waiting for more concrete GDP data to either soften or sharpen the decline.
Stay Updated
Want real‑time updates? Subscribe now to keep the latest foreign‑exchange headlines right on your device. No more being caught off guard!
