BoC's Tiff Macklem warns of further systemic risks to Canada, as well as weakening US Dollar

FXStreetSep 23, 2025 6:58 PM

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Bank of Canada (BoC) Governor Tiff Macklem noted on Monday that Canada will need to continue charting a "more independent course" away from the US, citing the US Dollar's (USD) recent performance across the market. The US Dollar Index (DXY) is down over 12.5% year-to-date and is testing three-and-a-half-year lows.

Key highlights

Trump's attempts to influence Fed are raising questions about continued independence of US monetary policy.
Trump's "Liberation Day" tariffs called into question the US Dollar's safe-haven role.
For many investors, value of US Dollar as a hedge has been dented.
Question now is whether US dominance in global financial flows will ebb.
Macklem suspects US Dollar will remain gloval reserve currency for the foreseeable future.
Canadian leaders need to chart more independent course given new relationship with the US, need to find new markets.
Recent performance of US Dollar may be telling us something.
Increasing purchases of US government debt by hedge funds is increasing leverage at financial system's core; there are vulnerabilities.
Business leaders and policymakers need to think about deeper structural weaknesses that threaten resilience of Canadian economy.

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