The Canadian dollar has plunged below its usual price radar, plummeting to hit the four-year low against the US dollar. The changing geopolitical narratives with the Trump regime tightening ropes surrounding tariffs and taxes have compelled CAD to fall dramatically.

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Why Is the Canadian Dollar Falling?

The Canadian dollar has hit a new four-year low against the US dollar. The fresh Tuesday statistics have reported the CAD falling dramatically against the US dollar. As the United States heads towards a new phase of political regime with Trump taking the lead, the president-elect’s stricter policies concerning tariffs have compelled the CAD to hit a new low.

“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing crime and drugs to levels never seen before,” Trump wrote, citing the issue of illegal immigration and illicit drugs.

Trump on Tuesday announced his plans to impose strict tariffs on Mexico, Canada, and China. The US president-elect has shown an aggressive stance towards these states, adding how he will be imposing a 25% tariff on all goods coming from Mexico, Canada, and China in an effort to restrict illegal immigration and drug smuggling into the US.

At the same time, Trump shared how he will be imposing an additional 10% tariff on China concerning the fentanyl crackdown.

“Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this, but, unfortunately, they never followed through,” he said.

Trump later reiterated how these tariffs would be effective from day one, soon after he assumed the presidential role.

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CAD Falls, Reacts To Trump’s New Plans

The Canadian currency has reacted sharply against the new statements made by Trump. The anticipation of tariffs being imposed on Canada has led investors to consider an alternate route. The currency has hit a 4-year low against the dollar.

“The sentiment on CAD right now is so bad that everyone is short. So the threshold for disappointment is actually very low,” she said. “It would only take a string of good data in Canada. Or bad data out of the US to impact positioning.”

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