I was in the studio at BNN Bloomberg to kick off the first trading week of 2026 to discuss the outlook for the Canadian dollar, the surprising resilience of the Canadian consumer, and the massive political risks lurking in the US.
The loonie managed a 5% gain in 2025 despite terrible sentiment, but looking ahead, the narrative is going to be dominated by trade headlines. Watch the segment here or read below:
The big theme for 2026: Noise vs. Signal on Trade
The USMCA renegotiation is the elephant in the room. We know the pattern with Donald Trump by now: he likes to throw a hand grenade into negotiations to throw everyone off balance. We saw it with steel and aluminum recently—deal at the finish line, then back to the start.
However, the base case remains that the US wants to stay in the agreement. The market is slowly figuring out that there is what Trump says and what he does. The danger is that uncertainty is worse than a bad deal. There is a dam of investment dollars waiting to go to work in Canada that is currently held back by this uncertainty.
The US Supreme Court Wildcard
A massive macro catalyst to watch in January or February is the US Supreme Court decision on presidential tariff powers.
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The Bullish Case: If SCOTUS limits the tariff power, it restores faith in US checks and balances. You can hold US dollars again.
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The Bearish Case: If they rubber-stamp the tariffs, the US political situation looks increasingly untenable. If we lose those checks and balances, we could see gold double from here.
Canadian Resilience & The “New Government”
Domestically, the story is better than the headlines. The Canadian consumer kept spending in 2025 despite the housing wobbles. With a new, more commodity-positive government in Ottawa and oil likely bottoming out this year, the investment landscape for Canada looks stable compared to the political chaos in the US and UK.
Key takeaways from the interview:
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USMCA: Expect noise and threats, but a full breakup of the deal is unlikely.
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Housing: We are seeing a soft floor. Bank stocks rallied in H2 2025, pricing in a recovery rather than a collapse.
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Gold vs USD: The US dollar was the worst-performing major currency of 2025
Video: Why you should buy the Canadian dollar dip on tariff bluster
