Dollar Steadies, Loonie Weakens as Trade Tensions Resurface

The US dollar has steadied in early trading on Monday after posting its largest weekly drop in over a month. The dollar's stabilization is attributed to profit-taking and a shift in market expectations regarding the Federal Reserve's interest rate path.

Investors are now recalibrating their positions ahead of key US economic data releases scheduled for later this week, including inflation figures and retail sales numbers. These data points will provide fresh clues on the health of the US economy and the trajectory of monetary policy, which will likely dictate the dollar's next major move.

The Canadian dollar, or loonie, weakened against its US counterpart on Monday due to escalating worries over global trade barriers. Canada's export-heavy economy is particularly sensitive to trade flows, given its strong ties to the US market and its role as a major exporter of natural resources.