Trump Blasts Canada's 'Currency Imbalance'
US President Donald Trump has opened a new front in the trade war, accusing Canada of running a currency 'imbalance' two days before Canadian counter-tariffs took effect.
The loonie's relative weakness compared to the greenback is what Trump appears to be referencing. The Canadian dollar is currently trading at around 72.37 cents US or $1.38 per U.S. dollar, a level that has been in place for most of the past decade.
According to TD Economics senior economist Vikram Rai, 'if you look at full year averages going back to 1970, there's only a handful of years where, on average, parity was achieved for the full year.' This means that the loonie has been under pressure due to the trade war, languishing in the low 70s.
The lower loonie is a boon for Canadian exporters, making it cheaper for others to buy Canadian products and more expensive for Canadians to buy abroad. However, this also puts pressure on production costs.