Canadian Dollar Slumps as US-Canada Trade Talks Collapse
The Canadian dollar declined sharply after US-Canada trade negotiations broke down on Friday. Ottawa's response to the breakdown was to promise a 'dollar for dollar' reaction to new US tariffs, and to offer further domestic support for provinces.
This policy move suggests that Canadian firms will be facing an even more uncertain operating environment, putting additional pressure on the currency against both other crosses and the US dollar.
The USD/CAD exchange rate rebounded towards its 200-day moving average at 1.3844 after the breakdown, but momentum measures have yet to indicate a turn in the trend.
VT Markets recommends positioning for a quick rally in the USD/CAD currency pair as it tests this crucial level. The firm suggests buying short-term call options with a strike price of 1.3900 to capitalize on immediate dollar strength.