Trump Delays Tariffs on Canadian Goods Amid Canada-US Deal
US President Donald Trump has delivered on his promise to bring relief from tariffs for Canadian goods. In a Truth Social post, he announced that the scheduled 50% tariffs on US$20 billion of Canadian goods have been postponed for three days. Trump also stated that 'the two sides, subject to the finalisation of documents, “have a DEAL!”' This deal appears to be linked to the Keystone XL pipeline, which Trump approved during his first term but was later canceled by Democrats.
The news has caused USD/CAD to pull back from minor horizontal resistance at 1.3910, with the pair remaining stuck in a narrow range between that level and a support zone running from 1.3870 down to the 200-day moving average at 1.3851. If USD/CAD breaks below this lower end of the support zone, 1.3775 is the first level to watch.
With the FOMC minutes from the July meeting set to be released soon, traders will be watching for signs of whether Fed tightening expectations have been pared sharply following recent softer US data. The hawkish dissents seen at the meeting may extend more broadly across the committee, which could impact USD/CAD.