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USD/CAD drifts lower as oil slips and tariff risks weigh
WTI crude dropped 3.4% to about $81.75, while Canada said it will retaliate with C$7.5 billion in support alongside new tariffs.
USD/CAD traded around 1.3835 on Tuesday, down about 0.07%, as both the US dollar and the Canadian dollar faced competing headwinds, according to FXStreet.
The sharp decline in oil prices weighed on the loonie, since Canada is a major crude exporter. WTI fell 3.35% to roughly $81.75, after President Donald Trump said the US Navy removed or destroyed mines in international waters of the Strait of Hormuz, easing concerns around energy supply risk.
At the same time, US data provided limited support for the greenback, while broader market sentiment appeared more risk friendly. The US Dollar Index, which tracks the dollar against a basket of six major currencies, was down 0.05% to about 98.95, with the Conference Board Consumer Confidence Index falling to 89.4 in August from 90.2 in July.
On the Canadian side, attention turned back to trade, as the Canadian government announced retaliatory tariffs on around $20 billion of US products. The measures, set to take effect September 8, cover about 700 products with tariff rates of 15%, 25% or 50%, and Ottawa also outlined a C$7.5 billion support package, though FXStreet said the immediate impact on USD/CAD remained limited.
Latest closeWTI crude $82.40 ▲1.4%|Dollar index 99.64 ▼0.3%