Canadian Dollar strengthens as Trump pauses 50% tariffs and USD slides before FOMC Minutes
The USD/CAD pair meets with fresh supply during the Asian session on Wednesday and, for now, seems to have stalled its recovery from the lowest level since June 3, touched earlier this week.
The Canadian Dollar experienced a slight boost on Wednesday as US President Donald Trump announced a three-day reprieve from 50% tariffs on Canadian goods following discussions with Prime Minister Mark Carney. Simultaneously, crude oil prices reached a near three-week high due to the US-Iran conflict near the Strait of Hormuz, adding downward pressure on the USD/CAD pair.
Concurrently, US data indicated cooling inflation and a slowdown in consumer spending, suggesting traders might scale back expectations for an immediate rate hike by the Federal Reserve. This trend, combined with the weakening USD, contributed to the US Dollar's slide. FOMC Minutes will be carefully examined for insights into the Fed's policy direction, which could further impact the USD/CAD pair.
The Loonie remains supported by a broader uptrend, but a break below the 200-day Simple Moving Average could expose support near 1.3820-1.3815. On the upside, initial resistance lies at 1.3910, with a potential move towards the psychological 1.4000 mark.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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