Loonie Falls as US Imposes Tariffs and Threatens More

The Canadian dollar, also known as the loonie, fell against the US dollar in late-morning trading due to the imposition of new tariffs by the United States. The 50% tariffs were applied to around $28 billion worth of Canadian goods, with President Donald Trump threatening even more increases.

According to Derek Holt, head of capital markets economics at Scotiabank, 'There are only mild market reactions thus far.' He noted that the weakness in the Canadian dollar was partially driven by lower oil prices and a slightly firmer US dollar. The loonie traded for 72.27 cents US compared to 72.67 cents US on Friday.

Sébastien Mc Mahon, chief economist at iA Financial Group, stated that the market reaction Monday is a signal that investors were not overly optimistic about the prospect of a US-Canada trade deal. He also noted that the loonie is one of the most shorted major currencies, leaving less room for further downside.