07:22 AM EST, 02/27/2025 (MT Newswires) -- The Canadian dollar (CAD or loonie) remains quite soft given the threat of United States tariffs, said ING.

These could come for any number of reasons noted the bank. The renegotiation of the USMCA looks like a difficult proposition where the stated aim from the U.S. now seems to be restricting Canada and Mexico's access to third markets -- in other words, China.

This looks to be a difficult negotiation and one where the U.S. will use the big stick of tariffs as a threat, stated ING.

The backlash against U.S. policies in Canada has seen resurgent support for the Liberal party as it stands up to the tariff threat, according to the bank. Politicians around the world might be inspired by the Liberals to stand and fight.

This could lead to more pricing of a global trade war, which is bad news for the commodities complex, added ING. The next move in the Canadian dollar is probably lower from here, with 1.4250/4280 now the near-term base.