The Canadian dollar is poised to face significant challenges as ongoing trade disputes between the United States and Canada continue to escalate. These tensions could undermine confidence among investors and traders, leading to a potential depreciation of the currency in the foreign exchange market.

Additionally, the market is bracing for anticipated interest rate cuts from the Bank of Canada. Such cuts would typically result in lower returns for investors holding Canadian assets, further pressuring the loonie. As the economic landscape evolves, the interplay between trade relations and monetary policy will be critical in determining the future strength of the Canadian dollar.