Over the weekend, President Trump followed through on his tariff threats, imposing new trade restrictions on the U.S.’s two largest trading partners—Canada and Mexico.
The reaction was immediate. The Canadian dollar (CAD) plunged to 1.4792 per U.S. dollar, its lowest level since 2003. However, the Loonie managed to claw back some of those losses, rebounding to the 1.4650 range by Monday morning.
The Canadian Dollar (CAD) has been losing ground against the US Dollar (USD) for three days straight, pushing USD/CAD back above 1.4400. This follows weeks of sideways movement, where the pair has been bouncing between 1.4300 and 1.4500 without a clear direction.
The Canadian dollar seems to be holding steady despite Monday morning’s AI stock crash. The selloff hit AI heavyweights like NVIDIA, which plunged over 10%, along with other tech stocks tanking across the board. This all started after news broke that a Chinese artificial intelligence startup, DeepSeek, developed AI systems comparable to top players like ChatGPT—but at a fraction of the cost.
When it comes to international trade, tariffs can have a massive influence on a country’s economy—and the currency that represents it. For Canada, a nation deeply integrated with the global economy and heavily reliant on exports, the presence or absence of tariffs has a direct impact on the Canadian dollar (CAD), the USD dollar (USD), and the overall Canadian dollar exchange rate. Let’s explore how tariffs—or the lack thereof—could shape the future of the Canadian economy and its currency.
