Notification: Get Real-Time News Alerts For Your Portfolio Today
Powered by
TOP SECTOR EUR STABLECOIN (0%)
TOP CRYPTO MARKET CAP $0.00T
24H VOLUME $0.00B
BTC DOMINANCE 0.0%
ETH DOMINANCE 0.0%
TOP SECTOR EUR STABLECOIN (0%)
TOP CRYPTO MARKET CAP $0.00T
24H VOLUME $0.00B
Trading Articles
Search for the latest articles on trading

BoC’s Macklem: Tariff concerns weigh on Canadian Dollar more than rate differentials

James Carter
James Carter

James Carter

James is a seasoned forex trader and financial analyst with...

Full Bio

James Carter

Share

Bank of Canada Governor Tiff Macklem stated that the Canadian dollar is more affected by tariffs than by the central bank’s interest rate policy. While rate changes can influence currency movements, trade restrictions impose direct economic pressure, leading to fluctuations in the Canadian dollar. Macklem noted that tariffs create uncertainty, impacting investment and trade flows more significantly than monetary policy adjustments.

The governor emphasized that when tariffs are imposed, they can disrupt supply chains and increase costs for businesses, weakening the Canadian dollar against other currencies. This is particularly relevant as Canada remains heavily reliant on international trade. Macklem explained that trade barriers force businesses to adjust pricing strategies, potentially reducing overall economic competitiveness.

Although interest rate decisions do play a role in currency valuation, Macklem suggested that the Canadian dollar reacts more strongly to shifts in global trade policies. He pointed out that past rate hikes did not always correspond with significant movements in the currency, reinforcing the idea that external trade factors weigh more heavily on its performance.

Macklem acknowledged that financial markets still monitor the central bank’s stance on interest rates, but they also factor in broader trade uncertainties. He highlighted that investor confidence in the Canadian dollar can weaken if trade restrictions persist, as they create long-term structural challenges for the economy. The unpredictability of tariffs, he warned, makes it harder for businesses and investors to plan ahead.

Additionally, Macklem addressed concerns about Canada’s export sector, noting that fluctuations in the Canadian dollar due to trade tensions could impact growth. A weaker currency can sometimes benefit exporters by making goods cheaper internationally, but excessive volatility can deter foreign investment. This underscores the delicate balance policymakers must maintain in responding to global trade developments.

Ultimately, Macklem stressed the importance of trade stability in ensuring a resilient Canadian dollar. While monetary policy remains a key tool for economic management, he argued that addressing trade barriers is just as crucial. He reiterated the need for Canada to remain proactive in global trade negotiations to protect its economic interests and currency stability.

Subscribe to our Newsletter

Every week, we’ll send you the latest tips, tricks, reviews and advice on how to trade to a wealthier lifestyle

View more articles by

Related Articles

Read More
Read More
Read More
Read More
Read More
Read More

Brokers Review

No reviews found in this category.

Top Stories
GBPUSD (1)
GBP/USD trades with negative bias around 1.2425 area, US NFP report awaited
EURUSD (1)
EUR/USD weakens below 1.0400 as traders await US NFP release
NZDUSD
NZD/USD gains traction above 0.5650 ahead of US NFP release
USDINR (2)
USD/INR holds steady as traders brace for RBI rate decision
USDJPY (1)
Japanese Yen retreats against USD amid some repositioning ahead of US NFP
Stocks fluctuate as bond rally pauses ahead of volatile U.S
Stocks fluctuate as bond rally pauses ahead of volatile U.S. jobs report
Japanese household spending surges to highest level since 2022 amid wage growth
Japanese household spending surges to highest level since 2022 amid wage growth
Crude oil declines for the week as trade tariffs outweigh Iran supply risks
Crude oil declines for the week as trade tariffs outweigh Iran supply risks
Japanese yen climbs amid rate hike speculation as U.S
Japanese yen climbs amid rate hike speculation as U.S. jobs report approaches
Ethereum faces resistance near $2,817 as Pectra testnet launch nears
Ethereum faces resistance near $2,817 as Pectra testnet launch nears