USD/CAD in focus as Trump threatens Canada with tariffs

From earlier: Trump threatens a 25% tariff on Mexico and Canada

And so it begins. The random Trump tweets sending waves throughout markets. The primary victims are the Canadian greenback and Mexican peso. The previous tumbled on the headline, with USD/CAD racing to its highest ranges since 2020 because it briefly breached 1.4100. The excessive touched 1.4177 earlier than coming again down.

The determine degree is a giant, huge one to look at in the mean time. It halted the climb earlier this month and whereas considerably breached earlier, the rating is but to be settled on the day by day shut. And never simply that, the month-to-month shut additionally highlights the significance of the 1.4100 mark.

As seen above, the month-to-month closes in January 2016 and throughout the top of the panic from the Covid pandemic all fell wanting holding above 1.4100. That regardless of each events even seeing value break above 1.4600 throughout these months. So, the month-to-month shut can be certainly one of relative significance. That earlier than shifting the main target to the dual peaks in January 2016 and March 2020.

However for patrons, they may wish to take a win the place they will get on the technical entrance. The basic facet of issues appears sorted no less than.

With the Financial institution of Canada set to maintain with a faster tempo in chopping charges, there’s a potential divergence particularly with Trump tariffs posing a menace to the inflation outlook within the US. On the similar time, it is usually going to weigh on the Canadian economic system. So, it is a double whammy.

Oh, how one election outcome adjustments issues eh?

And that is simply the beginning with Trump but to formally take workplace. It is going to be a enjoyable four years. 🤪

This text was written by Justin Low at www.ubaidahsan.com.



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