Canadian Dollar Hits Two-Month Low After Trade Talks Fail

The Canadian dollar fell 0.6 per cent to a two-month low of 72.23 cents US on Monday. The currency decline followed the collapse of trade negotiations between Canada and the United States, prompting Mark Carney to announce that Canada will impose retaliatory tariffs on U.S. goods.

Market analysts link the currency's weakness to the prospect of increased trade restrictions. Despite this drop, the Canadian dollar has remained above the 70-cent US threshold since December 2024.

At the same time, the U.S. dollar faced its own pressures. Treasury Secretary Scott Bessent attempted to lower long-term yields through accelerated bond buybacks, but the effort failed, creating a risk premium for U.S. government debt.