Forex
USD/CAD Bounces Back on US-Canada Trade Tensions
The USD/CAD currency pair is showing signs of recovery as US-Canada tensions escalate. The Canadian dollar has weakened following the breakdown in trade talks between the two countries over the weekend, causing it to drop below a multi-month low.
The imposition of 50% tariffs on Canadian exports worth around $20 billion by the US has added to the pressure on the loonie. However, rising oil prices could provide some support for the Canadian dollar due to Canada's status as a major oil exporter.
A hotter PCE reading or hawkish comments from Federal Reserve Chair Kevin Warsh could lift the dollar and push USD/CAD higher, while a softer inflation reading combined with elevated oil prices could favor the Canadian dollar.