Canadian Dollar Slips as Trade Conflict with US Escalates

The Canadian dollar is under pressure due to the ongoing trade conflict between Canada and the US. Commerzbank's Michael Pfister points out that the breakdown in negotiations and Ottawa's planned retaliatory tariffs could lead to a protracted trade conflict.

Pfister notes that Canada appears unwilling to give in to new US demands, which could weigh on Canadian sentiment indicators and undermine the recent tentative recovery in the short term. However, he also suggests that this tougher negotiating position could be beneficial for Canada over the longer term.

The breakdown in negotiations has been a recurring theme between the two countries, with last-minute disappointments becoming the norm. This time, it was due to new US demands being introduced at short notice that the Canadian side found unacceptable.