The Canadian dollar is showing resilience that a straightforward reading of U.S.-Canada trade tensions would not predict. A weakening U.S. dollar is providing enough cover to offset the threat of a potential trade war between Washington and Ottawa.
The case for Canadian dollar stability rests on a collision. Trade war risk on a currency like the loonie ordinarily points one way: higher tariff probability on Canadian exports softens demand for the currency. That pressure is present. What's changed is that U.S. dollar weakness has grown large enough to push back.
The counterargument is the part worth sitting with. Dollar softness is doing heavy lifting that Canadian fundamentals are not. It is an external force, and an unreliable one. The risk is that CAD resilience here reflects where the greenback is heading rather than any improved standing for Canada in the bilateral relationship. If the U.S. dollar finds a floor, the trade war discount on the loonie has nothing beneath it.
On balance, the loonie is holding because two forces are running in opposite directions and one of them is winning today. Which one keeps winning is the line to watch.