- The EUR/CAD is consolidating with prices that operate planes around 1,5607.
- The euro receives an impulse due to the delay in US tariffs on EU imports.
- Canada is still supported by robust retailers that benefit the CAD.
The euro (EUR) is strengthening against the Canadian dollar (CAD) on Monday, driven by the decrease in commercial tensions after the United States announced a delay in the implementation of new tariffs on European imports.
After falling below the simple mobile socks (SMA) of 10 days and 20 days on Friday, EUR/USD prices have stagnated with the torque operating in 1,5607 at the time of writing.
It is expected that the president of the European Central Bank (ECB), Christine Lagarde, and the president of Deutsche Bundesbank, Joachim Nagel, speak shortly. Moderate comments or concerns about economic perspectives can serve as an additional catalyst for the EUR/CAD.
The threats of US tariff
The previous concerns about a 50% general tariff on EU assets, which was initially going to be implemented on June 1, had strongly weighed on the single currency.
This uncertainty allowed the bassists of the EUR/CAD to take the pair downward in recent sessions. However, the reports of a positive call between former US president Donald Trump and the president of the European Commission, Ursula von der Leyen, helped change the feeling.
“We had a very pleasant call, and I agreed to advance in it,” Trump said before returning to Washington from New Jersey. “She said we will meet quickly and see if we can reach an agreement.”
Von der Leyen echoed the feeling, affirming on the social media platform X:
“Europe is ready to advance in conversations quickly and decisively. To reach a good agreement, we would need time until July 9.”
This diplomatic advance offered to the euro a new dose of optimism at the beginning of Monday’s negotiation, limiting the recent fall and stabilizing the EUR/CAD around key support levels.
Meanwhile, Canada’s retail sales data published on Friday provided a mixed image of domestic demand. Retail sales increased by 5.6% year -on -year in March, well above 3.8% forecast, backed by robust cars purchases and general goods. However, in monthly terms, sales slowed 0.5% in March, compared to 0.8% in February, although even easily exceeding the expected fall of 0.1%.
The combination of optimistic Canadian data and the recovery of the euro due to geopolitical relief has created a dynamic strip and loosen for the EUR/CAD torque, with the short -term address probably depending on the incoming inflation data and the comments of the Central Bank later this week.
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
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.
