If you’ve been living under a rock, here’s a quick update: U.S. President Donald Trump has signed executive orders imposing tariffs on imports from Canada, Mexico, and China. These tariffs were initially set to take effect on February 4, 2025. However, after negotiations, tariffs on Canadian and Mexican imports were paused for 30 days, delaying their implementation until March 4, 2025.
Oh, and completely unrelated—but always worth mentioning—Canada beat the U.S. in the 4 Nations Face-Off Tournament!
Leading up to the tariff announcement, the Canadian dollar dropped 5 cents between January 31 and February 4. Since the reprieve, it has been slowly clawing back its losses. More recently, it has been stuck at 1.42 and is unlikely to move significantly until there is more clarity on the direction of these tariffs. Most market analysts expect the Canadian dollar to weaken, much like it did earlier this month when markets braced for the initial tariff rollout.
However, we take a contrarian view. We anticipate positive news on the tariff front, which could push the Canadian dollar below 1.42. If tariffs are permanently eliminated, we could see USD/CAD drop to 1.38. That means we could be looking at a potential trading range of 1.38 to 1.48—between now and March 4!
The Canadian dollar is currently trading at 1.42292 CAD against the US Dollar.
