The Canadian dollar is set to edge lower over the coming months as the threat of U.S. trade tariffs remains in place despite an early reprieve, but the currency is expected to recover and trade at a higher level in one year,

The Canadian dollar steadied near a two-week high against its U.S. counterpart on Wednesday as data showed Canada's trade balance shifting into surplus, with the currency holding on to its gains since Canada won a reprieve from U.

The Canadian dollar dropped below 68 cents U.S. for the first time in more than two decades on Monday before rebounding by more than a cent, as uncertainty over a North American trade war sparked volatility across financial markets.