Canadian Dollar Weakens Amid Tariff Fears and Oil Price Support
The Canadian dollar weakened against its US counterpart on Tuesday as investors assessed the prospects of Canada reaching a deal with Washington to avoid new tariffs on its exports.
Despite higher oil prices supporting the Canadian dollar, the currency fell by 0.2% to C$1.39 per US dollar, or 71.94 US cents, after reaching its strongest level in over two months on Monday at C$1.3842 per US dollar.
The Canadian government is seeking a last-minute agreement with the US to prevent new 50% tariffs from taking effect at midnight on Wednesday, covering around $20 billion worth of imports from Canada.
Analysts believe that a durable agreement could push USD/CAD toward 1.37, while an escalation in tensions could send the pair back above 1.40 in the coming days.