Tariff pause, dollar dynamics and Canada’s new path
April 2025 was marked by a fragile pause in escalating U.S. tariff policies, a reassessment of the U.S. dollar’s dominance, and a transformative election in Canada. The 90-day tariff suspension, announced after Liberation Day celebrations, provided temporary relief to global markets but failed to dispel concerns over trade tensions and slowing economic growth. Meanwhile, the U.S. dollar faced pressure as the yields vs. dollar spread diverged, and investors questioned its safe-haven status. In Canada, Prime Minister Mark Carney’s victory and ambitious growth plan sparked optimism for productivity-driven prosperity, though tariff risks loom large. Central banks, including the U.S. Federal Reserve (Fed), European Central Bank (ECB), Bank of England (BoE), and Bank of Canada (BoC), remained focused on balancing inflation and growth, with divergent policies reflecting regional challenges.