Canadian dollar climbs as analysts question US dollar strategy

The Canadian dollar strengthened on Tuesday as the US dollar continued to slide, prompting fresh speculation from currency analysts about whether the decline of the greenback is intentional.

Karl Schamotta, chief market strategist at Corpay Inc., said recent trends raise questions about the direction of the US currency policy.

“There are good reasons to suspect that the Trump administration is deliberately engineering a decline in the dollar’s value on foreign exchange markets,” Schamota wrote in a note on Tuesday, according to the Financial Post .

“Policy actions over the last year have not been consistent with making the greenback great again.”

Before returning to office last year, President Donald Trump and several senior officials, including J.D. Vance and Scott Bessent, publicly suggested that a strong US dollar was not good for American business.

Schamotta noted that talk around the so called “debasement trade” has grown louder, though he said hard evidence remains limited.

He pointed out that US treasury yeilds and inflation expectations remain stable and that global capital is still flowing into US dollar assets.

Schamotta also said the dollar entered 2026 “overvalued" which may be contributing to its recent slide.

Other analysts say the weakening US currency could support gains for the Canadian dollar. “(U.S.) dollar sentiment is taking a beating,” said Shaun Osborne, chief currency strategist at Bank of Nova Scotia, in a note Monday, citing growing “sell America” and “hedge America” themes.