Trumps Tariffs Send Pound to Eight Year Best Exchange Rate Against Canadian Dollar

March 4, 2025 - Written by David Woodsmith

STORY LINK Trumps Tariffs Send Pound to Eight Year Best Exchange Rate Against Canadian Dollar

Canadian dollar (CAD) exchange rates dipped sharply against the Pound and Euro after President Trump announced that tariffs on Canadian imports would go ahead.

The Pound Sterling has held firm on hopes that the UK will not be the firing line.

The overall reaction to tariffs being imposed has been measured, but the Pound to Canadian dollar jumped to 8-year highs just below 1.8450 before trading just below 1.8400.

Trump has carried out his threat to impose 25% tariffs on imports from Canada and Mexico. In addition, extra tariffs on Chinese goods have been doubled to 20% from 10% with all measures coming into effect at Midnight US time Tuesday.

Canada has announced immediate retaliation against US imports worth C$30bn with levies on a further C$120bn due to come into effect over the next three weeks.

China has also imposed tariffs on US agricultural products and banned some bio-tech companies while Mexico has also promised action will be announced later Tuesday.

The Canadian dollar dipped sharply late on Monday as Trump stated that the tariffs would come into effect and the currency has avoided further selling at this stage.

The overall market reaction has also been relatively contained amid hopes that Canada will come to the negotiating table and work out a deal to have the tariffs annulled quickly, lessening the risk of an extended trade war.

Tensions will, however, remain very high, especially with the US also announcing that military aid to Ukraine will be suspended, including those supplies already in Europe which have not yet been delivered to Ukraine.

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TAGS: Pound Canadian Dollar Forecasts