Loonie’s plunge just one consequence of Trump tariff threat on your wallet

The loonie is shaping up arsenic an early casualty of U.S. president-elect Donald Trump’s latest waste and acquisition threats against Canada, pinch knock-on impacts expected elsewhere successful Canadian pocketbooks.

The worth of nan Canadian dollar dropped to a four-and-a-half-year debased of 70.53 cents to nan U.S. greenback precocious Monday successful nan aftermath of Trump issuing renewed threats via societal media for 25 per cent tariffs connected each imports from Canada and Mexico.

The loonie regained immoderate worth done nan greeting connected Tuesday but was down 0.7 per cent complete nan past time and held beneath nan 71-cent people by 10 a.m. eastern.

Despite a rally precocious past week, nan Canadian dollar has mostly faltered against its American counterpart since nan U.S. predetermination earlier this month.

Much of that weakness has been tied to promises Trump made during nan run to levy broad tariffs against different nations and instal different protectionist, America-first policies — moves that promote investors to heap into nan U.S. dollar, hurting different currencies.

The Canadian dollar is besides affected by nan differential betwixt nan argumentation rates of nan Bank of Canada and nan U.S. Federal Reserve, pinch a wider spread hurting nan loonie. Signs that Canada’s cardinal slope whitethorn rein successful nan gait of liking complaint cuts helped to substance nan loonie’s short-lived rally past week.

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A weaker Canadian dollar makes imports to nan state much expensive, which risks reigniting ostentation that has cooled successful caller months.

The effect of nan sagging loonie is already being felt astatine nan market store, BMO elder economist Sal Guatieri told Global News past week.

Canada is group to import much caller nutrient from nan U.S. arsenic nan wintertime approaches, which Guatieri said intends Canadians tin expect to salary much arsenic nan looming Trump presidency keeps nan loonie “on nan defensive.”

—With files from Global News’ Anne Gaviola.