The Canadian dollar and the Mexican peso risk further depreciation against the US dollar

Investing.com — The Canadian dollar and Mexican peso could face further depreciation against the U.S. dollar if U.S. President Trump decides to implement his proposed 25% tariffs on imports from Canada and the Mexico. This analysis comes from Francesco Pesole, forex strategist at ING.

According to Pesole, the market has not fully priced in the potential impact of such substantial tariffs on Canadian goods, suggesting the possibility of further declines in the Canadian dollar. He expects the exchange rate to rise beyond the 1.45 area for the moment.

FactSet data indicates that the USD/CAD exchange rate rose 0.9% to 1.4442, even reaching a multi-year high of 1.4512 earlier. Likewise, the exchange rate rose by 0.8% to 20.656.

These increases highlight the potential vulnerability of the Canadian dollar and Mexican peso against the U.S. dollar, particularly in light of proposed tariffs.

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