No help froma rate hike

On Monday, it dipped below US77 cents, about the level at which it found support through the latter part of 2017. However, the Bank of Canada meeting on Wednesday is unlikely to give the loonie much of a boost.

“There’s not a whole lot to love about the currency right now,” said Robert Kavcic, senior economist at BMO Capital Markets, noting that Canada does not appear as though it will be exempt from looming tariffs. “This is doing no service to the loonie, which we’ll see how much longer these levels can hold.”

After a rate hike in January, Canadian economic data have softened, suggesting there is little reason for another raise from the central bank.

Fourth-quarter GDP fell short of the BoC’s 2.5-percent forecast by 0.8 percentage points, and after a disappointing home sales figure for January, the odds of another miss in Q1 have risen.

“This could prove to be a bit of snoozer, with the Bank likely to leave rates unchanged, and Governor Poloz now seemingly priding himself on limiting forward guidance,” Kavcic said.

David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates noted that the U.S. exports US$2-billion more worth of steel to Canada per year than the other way around.

“Canada is America’s best friend in every respect,” he said. “This is all so sad. And make no mistake, consider NAFTA dead.”

Rosenberg expects retaliation and an outright global trade war, noting that at least Russian President Vladimir Putin should be smiling as the U.S. launches its trade attack on NATO.