Washington imposes 50% tariffs on Canadian goods, prompting Ottawa to announce retaliatory measures starting September 8.
The USD/CAD pair climbed to near 1.3820 in early European trading on Monday as trade tensions between the US and Canada intensified. The US imposed 50% tariffs on select Canadian products after bilateral trade negotiations collapsed on Friday, weakening the CAD against the USD.
Canada’s government responded by pledging to match US tariffs dollar-for-dollar, with retaliatory measures set to begin on September 8. The breakdown in talks marks a sharp reversal after months of negotiations, raising concerns over broader North American trade stability.
Market focus now shifts to the Jackson Hole symposium, where Fed Chair Kevin Warsh’s remarks on inflation could further influence USD strength. Meanwhile, geopolitical risks in the Middle East may support oil prices, offering potential relief to the commodity-linked CAD.