Canadian dollar notches strongest gain in three months on US trade policy shift

The Canadian dollar recorded its strongest gain against the greenback in nearly three months on Wednesday after an unexpected United States trade policy shift improved global economic prospects, Reuters reports.

The loonie gained 1.2% per American dollar, marking its strongest single-day advance since January 20.

According to the agency, US President Donald Trump has temporarily reduced new tariffs for multiple trading partners. However, he has raised duties on imports from China.

ForexLive analysts believe that excessively high tariffs could have triggered a worldwide recession. But global growth prospects now appear brighter. The Canadian dollar is expected to strengthen as a result.

Meanwhile, the governments of Canada and Japan have agreed to cooperate to maintain stability in the global financial system.