The Canadian dollar has risen sharply in recent days as the American currency weakens on uncertainty and chaos caused by U.S. President Donald Trump’s trade tariffs.
The Canadian dollar is currently trading above $0.71 U.S. for the first time in five months as the U.S. dollar weakens considerably.
The American greenback, as the U.S. dollar is known, has slumped even after President Trump walked back many of his tariff measures on April 9.
The Canadian dollar, known as the “loonie,” rose more than 1% on April 10 after the Trump administration clarified that its import tariffs on Chinese goods stand at 145%.
Concerns about an escalating trade war between the U.S. and China has currency traders moving into safe havens such as the Japanese yen, Canadian dollar, and Swiss franc.
The U.S. dollar fell 1.34% on April 10 on news that the country is ratcheting up its trade war with China even as it de-escalates with other countries around the world.
The U.S. dollar index that tracks the greenback against a basket of other world currencies is down 7.7% since January of this year.
Many economists expect the U.S. dollar to weaken further as the U.S. economy looks increasingly vulnerable to a recession this year.
Expectations are also rising for more interest rate cuts from the U.S. Federal Reserve this year as America’s economy slows, which would further weaken the greenback, say analysts.