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USD/CAD rises as trade tensions outweigh gains from firmer oil
USD/CAD was up 0.30% near 1.3880, supported by July PCE inflation at 3.7% year over year.
FXStreet reports USD/CAD climbed 0.30% on Wednesday, trading around 1.3880, as renewed US-Canada trade tensions pressured the Canadian dollar while US inflation data offered some support to the US dollar.
In the US, the personal consumption expenditures PCE price index was 3.7% year over year in July, unchanged from the prior month but above the 3.6% expected by markets. Core PCE held steady at 3.3% year over year, and both headline and core rose 0.2% on a monthly basis.
The update also cited firmer oil as a counterweight for CAD, with oil up 0.60% to about $81.20. Canada is a major oil exporter to the US, which FXStreet said can provide support to the currency.
On the trade front, Canada’s finance minister announced retaliatory tariffs of up to 50% on a range of US products after negotiations failed to produce an agreement, and President Donald Trump threatened another round of tariffs targeting Canadian cars, trucks, auto parts, and steel. FXStreet noted the pair held a constructive near-term technical tone around 1.3886, above key 100- and 200-period simple moving averages and nearby support levels.