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 value of the Mexican peso and Canadian dollar jumped Monday after officials from both countries said President Trump agreed to [delay wide-ranging U.S. tariffs by a month](

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.

The Canadian dollar, Mexican peso and euro were steady against the U.S. dollar on Tuesday following a wild ride on Monday when they rebounded sharply from multi-year lows after U.S. President Donald Trump suspended tariffs on Canada and Mexico by a month.

The Canadian dollar went on a wild ride Monday, trading below 68 cents U.S. in anticipation of Donald Trump’s 25 per cent tariffs only to soar over 2.5 per cent on news of a reprieve later that day. The loonie rose to 69.