06:27 AM EST, 01/07/2025 (MT Newswires) -- After a very tough Q4, which saw the Canadian dollar (CAD or loonie) fall by more than 6%, CAD "modestly" bounced by roughly 0.8% on Monday, noted Bank of Montreal (BMO).

While all the headlines in Canada were focused on the news of Prime Minister Justin Trudeau stepping down, the currency was driven more by rumors that the United States President-elect Donald Trump could scale back the most aggressive tariff moves -- since denied at source, said the bank.

Still, the US dollar (USD) broadly faded a bit after a breakneck run-up following the November election, stated BMO. Against the Canadian dollar, for example, it's up 4% since election day in November and more than 5% versus the euro (EUR).

The reprieve may not last long, depending on what transpires on the tariff front in the weeks ahead, added the bank.

Notably, around the turn of the year, the currency was

flirting heavily with its lowest level in almost 22 years, in other words, it was finally rebounding in the spring of 2003.