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USD/CAD rises after US-Canada talks collapse into a tariff war

CNBC reported the US imposed 50% tariffs on some Canadian products, and Canada plans retaliatory tariffs starting September 8.

Reported · Written up by our desk · Major Pairs

The Canadian dollar weakened versus the US dollar as US-Canada trade talks broke down and escalated into tariff measures, with USD/CAD recovering toward the 1.3820 area in early European trading, according to FXStreet.

FXStreet cited CNBC reporting that Washington imposed 50% tariffs on some Canadian products on Saturday after talks ended on Friday. Canadian Prime Minister Mark Carney said Canada would respond with retaliatory tariffs beginning September 8.

Traders are also watching remarks from the incoming US Federal Reserve chair Kevin Warsh at the Jackson Hole conference, where FXStreet said any hawkish signals could support the US dollar against the Canadian dollar in the near term.

FXStreet added that higher Middle East tensions could lift crude oil prices, which would be supportive for the Canadian dollar because Canada is a major oil exporter. It also noted technical signals, with USD/CAD holding a bearish near term tone below the 100 day simple moving average and an RSI around 34 near oversold territory.

Latest closeWTI crude $82.40 ▲1.4%

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