Canadian Dollar Hits Eight-Week Low Amid Trade Uncertainty

The Canadian dollar has hit an eight-week low against its US counterpart as investors bet on a slowdown in Canada's economy due to ongoing trade uncertainty. The loonie was trading 0.3% lower at 1.41 per US dollar, or 70.92 US cents, after touching its weakest intraday level since July 29 at 1.4106.

Markets are bracing for some softness in the economy as US tariffs hit targeted sectors, and consumers and firms rein in spending and investment, according to Karl Schamotta, chief market strategist at Corpay. The government's tax reforms and efforts to sell more to the European Union may eventually pay off, but the effects will be incremental and slow to arrive.

New US tariffs could slash Canada's fourth-quarter growth to below 1%, reflecting a new wave of uncertainty that threatens investment and hiring, Bank of Canada Governor Tiff Macklem said on Monday. Prime Minister Mark Carney unveiled a measure aimed at strengthening the economy last week, allowing businesses to immediately write off the cost of most new capital investments for tax purposes.