The Canadian Dollar (CAD) is facing significant challenges due to renewed US risks and interventionism, making it the weakest G10 currency. Commerzbank Research report, authored by Michael Pfister, anticipates that these risks will persist throughout the year, with only a gradual downward movement expected in USD/CAD. The report highlights the potential impact of the USMCA trade agreement review and ongoing tensions between Canada and the US.

Challenges for the Canadian Dollar

"We expect these risks to remain at the forefront for the rest of the year and anticipate only a gradual downward movement in USD-CAD."

"It is nevertheless clear that the CAD will continue to be affected by signals coming out of the White House this year, justifying an increased risk premium."

"As long as there is no comprehensive deal with the US or a finalised revision of the USMCA agreement, the recovery is likely to be slow."

"We therefore expect last year's trend to continue throughout the year: The CAD is likely to strengthen against a weak US dollar but continue to struggle against other currencies."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)