07:24 AM EDT, 08/12/2025 (MT Newswires) -- After dipping below 1.36 in July, USD/CAD is once again approaching its recent high of 1.38, noted National Bank of Canada.

While the United States' effective tariff on Canadian imports remains relatively modest at 5%, lingering uncertainty around market access and elevated duties in key sectors are weighing

on the Canadian economy, said the bank.

This was underscored by July's unexpected labor market weakness, with over 40,000 jobs lost, pointed out National Bank.

In the absence of an imminent trade detente between Canada and the U.S., the Canadian dollar (CAD or loonie) may face further downside in the coming weeks as markets reassess the probability of a September rate cut -- currently priced at less than 40%, stated the bank.