A few hours ago, The US president published a letter to Canada to inform them about the introduction of tariffs of 35% as of August 1. As usual, he justified this by citing the large amounts of fentanil that supposedly enter the US from Canada. To this is added the fact that Canada had reacted to previous tariffs, which Trump does not usually tolerate, says CommerzBank’s currency analyst Michael Pfister.
The downward trend in USD/CAD for several months can stop
“After the announcement, The Canadian dollar depreciated significantly, as expected. Something only recovered after reports arose that the assets compliant with the USMCA would be exempt from the highest tariffs. However, as is usually the case, this remains uncertain. We have not heard anything from Trump about this matter, and the reports suggest that a final decision has not yet been made. “
“As we warned, CAD operators should not be too sure that Donald Trump will leave their northern neighbors alone. Although the downward trend in USD/CAD for several months was mainly due to the weakness of the USD, we repeatedly emphasize that this would not necessarily continue indefinitely, given the weak state of the Canadian economy.”
“While the announcement was a surprise, confirms our opinion. Now we will have to wait and see what Trump’s final decision will be about the goods satisfied with the USMCA, but The Canadian dollar is likely to face a few turbulent weeks ahead. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
