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USD/CAD rises as Canada dollar lags amid US tariff escalation
USD/CAD last traded near 1.3869, held below the 20-day EMA around 1.3909 ahead of US July PCE data.
USD/CAD was modestly higher around 1.3870 during the European session Wednesday, with the Canadian dollar underperforming amid renewed US Canada trade tensions, FXStreet reported. The move comes after the US implemented 50% tariffs on a range of Canadian goods, following a failed effort to reach a trade deal.
In retaliation, Canada plans retaliatory tariffs beginning September 8, according to FXStreet, with measures described as up to 50% on USD 20 billion of imports from the US. Danske Bank said the Canadian steps look proportional and aimed at strengthening Ottawa’s negotiating position, but also noted the actions add uncertainty for businesses and could pressure prices and supply chains.
FXStreet also pointed to the risk that the dispute could deepen, noting the Trump administration is said to be weighing additional measures. The US dollar was slightly higher ahead of US Personal Consumption Expenditure Price Index data for July, with core PCE expected to hold steady at 3.3% year over year, and the monthly core reading projected at 0.2%.
On the technicals, USD/CAD remained below the 20-day exponential moving average near 1.3909 and the 50.0% Fibonacci retracement near 1.3901, keeping the near-term bias bearish, FXStreet said. It cited support near the 61.8% retracement at 1.3819, with a deeper floor around the 78.6% level near 1.3703.