Institutions: If the trade tension continues, the Canadian dollar may fall

On March 5, Monex Europe analysts said in a report that the performance of the Canadian dollar in the foreign exchange market lagged significantly, and it only pumped slightly against the weakening dollar. Analysts said the move was justified after U.S. President Donald Trump imposed 25 percent tariffs on Canadian imports on Tuesday. “Tariffs should mean that [the Canadian dollar] is trading at a discount, and that’s increasingly being reflected in pricing.” They said that after these tariffs and Canada’s retaliatory measures, Canada’s economy will be in a much worse position than the United States. A weaker US dollar is likely to keep the CAD near current levels in the near term. However, if trade tensions between Canada and the US persist, USDCAD could rise to 1.50 in the long run.