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(Bloomberg) -- Canadian money managers are gearing up for more turbulence in trading this week after an escalating trade war sparked Monday’s sharp selloff.

Bay Street money managers are moving into safer assets after US President Donald Trump moved towards finalizing tariffs against Canada with an executive order over the weekend. Canada responded by promising that retaliatory tariffs would begin Tuesday. Investors are focused on assets like precious metals, cash and bonds in US dollars. Market strategists are also leaning toward recession-resilient domestic companies.

The Canadian dollar continued the losses it’s sustained since November when Donald Trump won the election, slipping to its lowest intraday level in nearly 22 years on Monday morning before paring some of the losses. It fell as much as 1.7% on Monday, down to just under 68 Canadian cents against the greenback.  

Philip Petursson, chief investment strategist at IG Wealth Management, said his team expects that the loonie could come under further pressure with fair value suggesting it may go as low as 65 Canadian cents. 

“What that means though is if you can pick up a couple of points on the currency and then you want to avoid some of the equity market volatility, US dollar bonds are an attractive place to be,” Petursson said in an interview.

Petursson added that traders could also look to stocks related to gold, which has returned as a safe haven trade. Materials was one of the only sectors in the green on Monday morning as gold prices rose to near record levels.

With tariffs expected to come into effect in Canada as soon as Tuesday, barring an 11th hour reversal, Canada’s main stock index was battered by selloffs. The S&P/TSX Composite Index fell as much as 3.1%, its biggest intraday decline since last August. The index pared its losses after Mexico’s president, Claudia Sheinbaum, indicated the tariffs on Mexico may be delayed, though there has been no talk yet of a delay in Canadian tariffs. 

Purpose Investments’ chief market strategist, Craig Basinger, said these kinds of knee-jerk reactions can destroy a portfolio. Basinger said his team has been holding onto extra cash and has a more defensive stance on their equities. 

“Our view on the strategy has been, even since Trump got elected: there’s going to be noise,” Basinger said, adding that the last thing traders want to do is dramatically shift their portfolio every time there’s a new trade war headline.

Domestic companies with a resilience to tariffs and recessions may also be options to withstand trade war-related volatility in the coming months. Colin Cieszynski, chief market strategist at SIA Wealth Management, pointed to made-in-Canada companies like discount retailer Dollarama Inc., telecom giants, resource and power companies as “domestically focused” companies that would be spared the full brunt of tariffs. 

Cieszynski added that these domestic names may be in the red on Monday, but they haven’t been hit as hard as other sectors in the S&P/TSX Composite Index. 

Bryden Teich, chief investment officer at Avenue Investment Management Inc., echoed the case for domestic companies that have a track record of delivering on capital through any kind of economic cycle. He pointed to Ontario-based insurance firm Definity Financial Corp and Constellation Software Inc. as favorite Canadian names that fit the bill.  

He also argued that any tariffs will last a lot longer than the markets expect and traders will have to adjust to the new economic reality. During the first Trump administration, Teich said the view was that tariffs would be a fringe idea that would be removed shortly after they were put in place. This time is different after Trump tapped pro-tariff advisors like economist Stephen Miran, who argued that tariffs could be effective in boosting the US economy. 

“I think the people that he’s put in place on a policy level, I think are far more serious about using tariffs for longer periods of time,” Teich said. “And I think that this is just going to be a part of the economic environment that people have to get used to.”