Canadian dollar hits eight-week low on trade shocks
The Canadian dollar fell to 1.3899 per U.S. dollar as proposed 12.5% U.S. tariffs and escalating hostilities in the Middle East weighed on investor sentiment. Recent data showing a first-quarter economic contraction and rising operating costs further pressured the currency despite a rise in oil prices.
Canada saw its currency fall 0.4% to an eight-week low of 1.3899 per United States dollar on Wednesday. The decline follows a dual shock of proposed U.S. import tariffs and escalating military hostilities in the Middle East. For investors, the loonie’s drop to 71.95 U.S. cents signals deepening vulnerability to global trade protectionism and energy-driven volatility.
### Trade Tensions and Geopolitical Risk The Trump administration proposed new tariffs reaching 12.5% on imports from 60 economies, including Canada. U.S. officials cited a failure to curb trade in goods involving forced labor, though trading partners rejected the assertion. This policy shift coincided with a spike in geopolitical risk as Iranian attacks on Kuwait damaged an airport.
