We might call it whiplash, but is it really whiplash if you’re expecting it?
In the last 24 hours, President Trump has floated the idea of delaying broad-based tariffs on Canada and Mexico until April 4th while also confirming that tariffs on Canada, Mexico, the European Union, and China are set to take effect next Tuesday as planned.
The Canadian dollar reacted this morning by sinking a full penny against the U.S. dollar. While tomorrow’s Canadian GDP data, U.S. PCE Core Price Index, and personal income/spending reports may contribute to increased volatility heading into the weekend, the reality is that trade, tariffs, and President Trump’s social media posts will continue to dominate market attention. Anything could happen leading up to the deadline.
If the 25% broad tariffs go into effect on March 4th as currently scheduled—and as posted by President Trump on his Truth Social account—you can expect the Canadian dollar to nosedive into the high 1.40s range, similar to what happened at the end of January leading up to the original implementation date of February 4th.
If you’re a U.S. dollar seller, you might want to hold off on some of your trades and see what unfolds over the weekend leading into Tuesday. If you’re a U.S. dollar buyer, it may be better to buy sooner rather than later, as the current USD/CAD rates could be the best-case scenario for you.
The Canadian dollar is currently trading at 1.44363 CAD against the US Dollar.
