Trump’s Victory Spurs Fears of a Weaker Canadian Dollar

The election of Donald Trump presents a decidedly challenging outlook for the Canadian dollar. The confluence of diverging interest rate policies, anticipated fiscal developments in the U.S., broader economic considerations, and the potential impact on trade and commodities suggest a significant likelihood of continued downward pressure on the loonie. While a precise prediction is impossible, experts forecast a move through 66.7 cents U.S., and maintaining a high-conviction bullish call on the long end of the Government of Canada bond yield curve remains a prudent strategy. Further analysis will be necessary as the Trump administration’s policies unfold and their impact becomes more clearly defined. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie. The Canadian dollar’s vulnerability extends beyond just interest rates and fiscal policy. The ongoing competition of Canada’s competitiveness is another key factor. Canada has been sliding in the global competitiveness rankings, falling to 18th in 2024 from eighth in 2020, according to the World Economic Forum. Canadian productivity is stagnant while the U.S. surges ahead, a major structural headwind for the loonie, which must weaken in response to keep Canadian exports competitive. Furthermore, the erosion of competitiveness has been a major reason for the pushback against the Canadian government’s capital gains inclusion rate hikes in the 2024 budget (as most of those proposals are still held up in Parliament). The Canadian dollar’s dependence on commodity exports also plays a role. While Trump’s likely pro-oil policies will boost domestic oil production and lower prices compared to what a Kamala Harris administration may have been able to realize, there is already a relatively low West Texas Intermediate oil price (under US$70 per barrel) with limited room to fall before bumping up against U.S. producers’ marginal cost of production. Meanwhile, gold prices are likely to continue to rise under a Trump presidency due to the generally high levels of policy and geopolitical uncertainty and the perceptions of fiscal and inflationary risks pushing “gold bugs” back into their natural asset class (and supporting Canadian exports). Finally, increased trade tensions and potential tariffs between the U.S. and its trading partners, including Canada, could also negatively impact the loonie.

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