Don’t miss this month’s edition of the George Davis Report, where George discusses risks associated with US trade tariffs.
What you need to know:
The Canadian dollar has depreciated about 5% since the US election.
The pace of the depreciation picked up in late November, after Trump mulled imposing across the board 25% tariffs on Canadian goods.
While the recent 30-day delay has removed some of the “tariff premium” in USD/CAD, the subsequent imposition of steel and aluminum tariffs reminds us that there is more to come.
With the tariff issue unresolved, CAD will remain sensitive to headline risk and bouts of higher volatility.
Because specific details around tariffs are still lacking, we employ scenario analysis to present potential outcomes and their impact on the Canadian dollar.
For the trading range:
USD/CAD
Buyers
1.4100/1.4200
Sellers
1.4500/1.4600
