Canada's Tariffs Spark Fresh Pressure on Loonie and Supply Chains

The Canadian dollar and North American supply chains are under pressure as Canada's $27.6 billion retaliation against U.S. imports takes effect.

The tariffs, covering over 700 U.S. products, add a new layer of uncertainty for Canadian manufacturers and consumers, keeping the loonie vulnerable to shifting expectations for economic growth and interest rates.

The immediate impact has seen the loonie hit its weakest level since August 19, with futures traders pricing in higher odds of a Fed rate hike following U.S. inflation data coming in at 3.7% annualized.