Canadian Dollar Plunges as US-Canada Trade Talks Collapse
The Canadian dollar weakened after US-Canada trade negotiations broke down on Friday, leaving it as the worst-performing G10 currency that day. It fell 0.5% against the US dollar as Ottawa said it would respond 'dollar for dollar' to the latest US tariffs and indicated further domestic support for provinces.
The policy response points to a more uncertain operating backdrop for Canadian firms, adding near-term pressure on the currency across crosses as well as against the greenback. In spot terms, USD/CAD rebounded towards its 200-day moving average at 1.3844.
Despite this, the broader downtrend in place since late June remains intact, with momentum measures yet to indicate a turn. The near-term bias remains for further US-dollar strength, where a move through the mid-1.38s is seen as opening the way towards the mid to upper 1.39s.