07:42 AM EST, 12/05/2024 (MT Newswires) -- The Canadian dollar (CAD or loonie) has faced persistent challenges in Q4, declining 3.6% against the US dollar (USD) over the past two months, said National Bank of Canada.

The latest wave of weakness has been further intensified by United States political developments with President-elect Donald Trump threatening to impose a 25% tariff on imported goods from Canada, noted the bank.

Considering that the majority of Canada's trade surplus with the S. comes from energy commodities, the prospect of imposing blanket tariffs on Canadian imports appears highly improbable, stated National Bank.

At this point, the bank remains optimistic that Canada will avoid blanket tariffs. However, the Canadian dollar isn't entirely in the clear, as it continues to face downward pressure from cyclical forces.

National Bank maintains its USD/CAD target of 1.45 for the first half of 2025