According to Bloomberg, the loonie fell to C$1.3844 per US dollar after negotiations between Washington and Ottawa broke down. The selloff made the Canadian dollar the weakest performer in the G-10, with traders reacting to fresh 50% US tariffs on billions in Canadian goods.
Currency moves are a fast market verdict on growth. A weaker loonie raises import costs, signals softer demand ahead, and narrows the Bank of Canada's room to cut rates if tariffs hit exports and business confidence. The trade rift threatens Canada's growth outlook directly.
This is what a policy shock looks like when it hits a trade-heavy currency first. The market is not waiting for economists to revise forecasts. It's pricing the chain reaction now: weaker exports, softer growth, more pressure on Ottawa, and a central bank forced to choose between supporting demand and defending the currency if Washington keeps the screws on at 50%.
Filed to the Markets desk · Aug 24