Loonie Surges as Tariffs and Oil Prices Boost Canadian Dollar

The Canadian dollar strengthened to around 1.38 per USD in September, largely due to broad US dollar weakness.

This move also reflects Canada's retaliatory tariffs on US goods that took effect after Prime Minister Mark Carney's government failed to reach a deal with Washington last month.

The counter-tariffs cover $20 billion of US goods, with duties ranging from 15% to 50% on products including steel, furniture, clothing, and electronics.

Firmer crude prices have also supported the Canadian dollar, given Canada's status as a major oil exporter. Iran threatening to strike regional energy infrastructure in response to US actions has added further upside risks to oil prices.