US-Canada Trade Talks Collapse: CAD Weakens Amid Tariff Escalation Fears

The Canadian Dollar has weakened significantly following the collapse of trade talks between the US and Canada. The breakdown in negotiations led to the imposition of 50% tariffs on some Canadian products by the US, with Canada vowing to retaliate 'dollar for dollar' from September 8.

The USD/CAD pair rose 0.52% to around 1.3830 on Monday, with experts warning that the situation could become even more volatile as the retaliation deadline approaches. Historically, similar trade disputes have caused the Canadian Dollar to slide by about 8% against the greenback.

The US has also announced plans to broaden secondary sanctions on Iran, which could potentially target activities in specific sectors and pressure trading partners. This development may lead to increased oil prices, which could limit further gains for the USD/CAD pair.