Canada’s retaliatory tariffs take effect early Tuesday on US imports worth 27.6 billion Canadian dollars. Two days earlier, the US president wrote that the Canadian dollar’s “misalignment” against the US dollar was “unacceptable”. We place the currency at the crossroads raised by the question itself: are markets pricing a trade war that weakens the Canadian dollar, or a rate path that strengthens it? We measured moves against six currencies, read derivatives pricing for the 28 October and 9 December meetings, and examined the Commitments of Traders report. The answer from the measurement is singular, and the opposite of what the presidential headline suggests.
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