Canadian dollar erases intraday gains after Trump's speech

Summary

Following Trump’s remarks labeling the CAD/USD imbalance as ‘unacceptable’ and threatening to ban Bombardier products, the Canadian dollar erased its daily gains Zhitong. This occurs amid an escalating trade war where the US has imposed 50% tariffs on $20B of Canadian goods, and Canada’s retaliatory measures take effect today, September 8 .

Impact Analysis

So Trump is back to the ‘currency imbalance’ playbook, but it’s a total head-fake. He’s slamming the CAD for being too weak while simultaneously threatening Bombardier and maintaining 50% tariffs that fundamentally crush the Canadian macro outlook . It’s a classic paradox: he wants a stronger CAD to fix the trade deficit, but his aggressive protectionism is the very thing driving the loonie lower as growth expectations tank .

The specific hit on Bombardier—demanding they move production to the US or face a ban—shows this is moving from broad tariffs to targeted industrial decoupling . With Ontario threatening to cut off power and mineral supplies in response , we’re looking at a structural break in the US-Canada relationship. Bottom line: don’t be fooled by the ‘unacceptable imbalance’ talk. The economic weight of these tariffs and the retaliation starting today means the path of least resistance for CAD remains down. I’d stay short CAD/USD and avoid North American aerospace until the dust settles.