Story
Canadian Dollar Slips as US Tariff Deadline Looms
The Canadian dollar weakened against its U.S. counterpart on Tuesday as investors nervously monitored last-ditch trade negotiations aimed at preventing a new round of U.S. tariffs on Canadian goods. The currency, known as the loonie, slipped 0.2% to 1.39 per U.S. dollar, or 71.94 U.S. cents, pulling back from a more than two-month high of 1.3842 reached on Monday.
High-Stakes Tariff Negotiations
Canada is racing against a Wednesday midnight deadline to secure a deal and avoid a proposed 50% U.S. tariff on approximately $20 billion of its imports. According to the Canadian Prime Minister's office, the country's leader spoke with U.S. President Donald Trump on Monday in an effort to find a resolution.
The outcome of these talks presents a significant catalyst for the currency pair. According to strategists at Monex Europe, a lasting agreement could see the USD/CAD exchange rate fall toward the 1.37 level. Conversely, an escalation of the dispute could push the pair back above 1.40 in the coming days.
AdOil Prices and Domestic Data
Providing some support for the commodity-linked loonie, oil prices edged higher amid concerns over potential energy supply disruptions. West Texas Intermediate (WTI) crude futures, a key benchmark, rose 0.6% to $85.03 a barrel. Oil is one of Canada's primary exports, making its currency sensitive to price fluctuations.
On the domestic front, new data showed continued strength in the housing market, with Canadian home sales rising for a fourth consecutive month in July, up 0.5% from June. In the bond market, Canadian government bond yields pulled back slightly from recent multi-year highs.
Read next
More on Forex
Polish Zloty Hits 11-Month Low Against Euro on Energy Price Pressure
The Polish zloty weakened to 4.410 against the euro, its lowest point since November 2023, as rising energy prices and caution ahead of a U.S. Federal Reserve decision weighed on the currency.
Sterling Slips as Dollar Strengthens Ahead of Fed Decision and UK Budget
The British pound lost ground against a resurgent U.S. dollar on Wednesday as market attention shifted from tech sector volatility to upcoming central bank decisions and the UK budget announcement.
Eurozone Bond Yields Climb as French Fiscal Concerns Return Ahead of Fed, ECB Decisions
Yields on French and German government bonds rose as relief from a ratings affirmation for France proved temporary, with investors refocusing on fiscal challenges and awaiting key policy verdicts from the U.S. Federal Reserve and the European Central Bank.
Canadian Dollar Slips as Markets Await Bank of Canada, Fed Decisions
The Canadian dollar edged lower against its U.S. counterpart, snapping a seven-day winning streak as investors adopted a cautious stance ahead of Wednesday's key interest rate announcements from both the Bank of Canada and the U.S. Federal Reserve.