07.07.202514:35:06UTC+00Canadian Dollar Gives up 8-Month Highs

The Canadian dollar weakened past 1.36 against the US dollar, retreating from its eight-month highs. This downturn comes as the US dollar recovered from its three-year lows while investors processed new developments regarding US reciprocal tariffs. Initially, tariffs were set to be reinstated on up to 70% of imports by July 9th; however, this deadline has now been extended to August 1st. This extension provides negotiators with additional time but also maintains the uncertainty surrounding potential duties on significant Canadian exports, including aluminum and lumber. Domestically, Statistics Canada's June report indicated that private-sector activity has contracted for the seventh consecutive month, and the merchandise trade gap has expanded. These factors highlight uneven economic growth, which may lead the Bank of Canada to consider adopting a more dovish monetary policy approach.