CAD Surges as Trump Pauses Tariffs, Boosts Liquidity
The Canadian dollar experienced a significant boost after US President Donald Trump's unexpected announcement to pause tariffs on Canada for three days.
This move came as a surprise, especially given the previous concerns that the threatened 50% tariffs would be implemented, causing markets to worry about the impact on trade between the two countries.
Following Trump's statement, the Canadian dollar erased all its losses and even extended gains against the US greenback. The USD/CAD exchange rate broke through a key support zone around 1.3920, opening the door for further appreciation towards the next support level at 1.3750.
The US Treasury's announcement to increase the size of its liquidity-support buyback operations for longer-dated securities also contributed to the Canadian dollar's upward momentum.