Investing.com — The Canadian dollar and Mexican peso may be at risk of further depreciation against the U.S. dollar, should U.S. President Trump decide to implement his proposed 25% tariffs on imports from Canada and Mexico. This insight comes from Francesco Pesole, a forex strategist at ING.

According to Pesole, the market has not fully accounted for the potential impact of such substantial tariffs on Canadian goods, suggesting the possibility of additional declines in the Canadian dollar. He anticipates a rally in the exchange rate beyond the 1.45 area for the time being.

FactSet data indicates that the USD/CAD exchange rate increased by 0.9% to 1.4442, even reaching a multi-year high of 1.4512 earlier. Similarly, the exchange rate rose by 0.8% to 20.656.

These increases underscore the potential vulnerability of the Canadian dollar and Mexican peso against the U.S. dollar, particularly in light of the proposed tariffs.

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