The Canadian dollar remains below CA$1.40 versus the US dollar as markets brace for softer growth, with US tariffs weighing on key sectors and spending and investment slowing, according to Corpay in a note Wednesday.
Tax reforms, investment incentives and efforts to expand exports to the European Union could support growth over time, though their impact is likely to be gradual, said Corpay.
"The loonie's weakness, however, is largely a function of the dollar's strength," wrote Corpay Chief Market Strategist Karl Schamotta in the note.
The Canadian dollar's recent weakness also largely reflects broad-based US dollar strength, added Schamotta.