CAD Fights to Gain Traction Amid Escalating Tensions
The Canadian dollar is trading in a tight range due to higher crude prices and escalating tensions between Canada and the US. Oil prices have climbed after Iran's Houthis targeted shipping, reigniting inflation worries. This has pushed up US Treasury yields, making it harder for the CAD to gain momentum.
US Trade Representative Jameson Greer has hinted at a preference for separate bilateral arrangements with Canada and Mexico over the existing trilateral pact. President Trump has piled on by imposing a 50% tariff on Canadian exports, including autos. Canadian retail sales ex-autos are forecast to jump 1.4%, but this may not be enough to offset the negative impact of the tariffs.
Global risk appetite has soured further due to rising oil prices and fresh tech-sector turbulence. Asian equity markets were mixed, with Japan's Topix jumping 2.44% after reopening for trade. European equities are edging higher across the board, but S&P 500 futures are down 0.35%.