Canadian Dollar Climbs to 2-Week High

The Canadian dollar appreciated toward 1.36 per US dollar reaching two-week highs amid a global trade pivot favoring Canada’s relative stability over US policy uncertainty. While the economy officially shrank by 0.6% in the fourth quarter, the Loonie climbed because the US Supreme Court struck down broad emergency tariffs. Although the White House responded with new Section 122 duties, these rules explicitly exempt trade-compliant goods from Canada. Furthermore, while US producer prices came in higher than expected, the US dollar remained flat as investors focused on falling Treasury yields. Canada also benefited from a recovery in oil prices toward $66 after progress stalled in nuclear talks. This combination of secured trade status and higher energy prices allowed the currency to ignore the domestic growth slump. Investors are essentially treating the Loonie as a stable alternative in a messy North American trade environment.

The Canadian Dollar touched 1.37 against the USD, the lowest since January 2026. Over the past 4 weeks, US Dollar Canadian Dollar gained 0.11%, and in the last 12 months, it decreased 4.13%.

The Canadian dollar weakened toward 1.37 per US dollar on Monday, hovering near monthly lows as global markets balanced a swift pivot in US trade policy against a softening domestic inflation outlook. While the loonie initially rose after the US Supreme Court struck down previous emergency duties, the rally evaporated as President Trump invoked Section 122 to impose a new 15% global surcharge. This trade friction re-established a major headwind for Canada's export-heavy economy just as January CPI data showed inflation cooling to 2.3%, raising bets that the Bank of Canada may soon abandon its 2.25% pause. The currency faced further pressure from a resilient greenback, supported by hawkish signals from incoming Fed leadership and US core PCE holding at 3%. Even with a modest firming in oil prices, the loonie remained on the defensive as the narrowing of Canada's yield advantage and renewed protectionist risks outweighed the brief optimism of the landmark court ruling.