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Canadian dollar slips as oil falls and US trade tensions rise
USD/CAD is near the top of its weekly range around 1.3867 ahead of the US PCE inflation report and Jackson Hole.
The Canadian dollar weakened against the US dollar on Wednesday, giving back earlier gains as oil prices retreated and US-Canada trade tensions escalated, FXStreet reports. USD/CAD was testing the top of its weekly range near 1.3867 after bouncing from 1.3825 lows on Tuesday.
FXStreet links the move to pressure from crude, noting Brent traded around $85.70, nearly 8% below the prior session’s highs above $93.00. The outlet also points to expectations around talks to reopen the Strait of Hormuz as another factor weighing on oil prices.
Trade concerns also added strain on the Loonie after Canada announced new tariffs of up to 50% on a broad range of US products in retaliation for US levies. Trump responded by threatening new tariffs covering Canadian cars, trucks, auto parts and steel.
With investors cautious about making large directional bets on the dollar ahead of the US Personal Consumption Expenditures (PCE) Price Index and second-quarter GDP, attention also turns to the Jackson Hole Symposium. FXStreet says Fed Chairman Kevin Warsh is expected to provide signals on monetary policy, while the market looks for core PCE at a 3.3% yearly pace and GDP growth at a 1.5% annualized rate.
Latest closeWTI crude $82.40 ▲1.4%|Brent $88.59 ▲1.8%