The value of the Canadian dollar has fallen to its lowest level since the early days of the COVID-19 pandemic. Analysts suggest that cabinet conflicts arising from threats of tariffs imposed by U.S. President-elect Donald Trump and related responses have influenced this decline.
According to Bloomberg News, on the 17th (local time), the Canadian dollar dropped 0.5% to 1.43 Canadian dollars per U.S. dollar. This is the lowest level since March 2020, when the COVID-19 pandemic began.
The Canadian dollar showed a sharp decline starting from mid-September, ahead of the U.S. presidential election. During this period, it plunged 6.7%. Earlier, on the 25th of last month, President-elect Trump announced that since crime and drugs were entering the U.S. through Mexico and Canada, he would impose a 25% tariff on all products imported from the two countries until the issue was resolved.
While the threat of U.S. tariffs led the weakness of the Canadian dollar, political instability added to the pressure on the same day. The news that Deputy Prime Minister and Minister of Finance Chrystia Freeland, who had clashed with Prime Minister Trudeau over the countermeasures, resigned on the 17th accelerated the Canadian dollar's decline.
Douglas Porter, Chief Economist at the Bank of Montreal, stated, "There are concerns that the (Canadian) currency will remain somewhat weak until the tariff front eases or economic news that helps support the currency emerges."
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