08:32 AM EST, 01/26/2026 (MT Newswires) -- Commerzbank noted ongoing risks to the Canadian dollar CAD (or loonie) posed by the United States.

In the past few days, the United States President Donald Trump has launched several new attacks. First, Trump withdrew his invitation for Canada to join the 'Board of Peace' that he heads, even though Canada wanted to examine the invitation more closely anyway.

Over the weekend, Trump then made several threatening social media posts, including a warning that he would impose 100% tariffs on Canadian imports to the U.S. if Canada were to make a deal with China.

It cannot be ruled out that Trump was offended by Canadian Prime Minister Mark Carney's speech in Davos, which nearly overshadowed his own, wrote the bank in a note to clients. Added to this was Carney's trip to China, where he attempted to secure new export destinations -- a move that is hardly surprising given that the largest export market is becoming an increasingly difficult trading partner.

In light of these developments, the CAD is likely to remain heavily dependent on the White House this year, stated the bank. The U.S. President may back down again, or an agreement may be reached whereby tariffs on non-USMCA-compliant goods are raised, while the USMCA exemption remains in place for the time being.

Both scenarios would be acceptable for the CAD in the short term, according to the bank. In the medium term, however, it should now be clear to all market participants that risks associated with the U.S. are the main reason why the Canadian dollar continues to trade so weakly.

With the USMCA agreement due to be revised this year and Trump insisting that Canada alone would benefit from it, the CAD is likely to face several more difficult months, added Commerzbank.