The Canadian Dollar briefly rallied to a new five-week high against the Greenback.
Despite the fresh bid, the CAD fell back into familiar congestion as risk aversion weighs.
The Trump administration is bound and determined to enact sweeping tariffs, crippling investor sentiment.
The Canadian Dollar (CAD) traveled a lot of ground to go nowhere on Wednesday. The Loonie rose to a new five-week peak against the US Dollar (USD), but lost ground and returned to flat on the day as investor sentiment gets pummeled by a fresh batch of roving tariff threats from US President Donald Trump.
Wide-ranging tariffs are becoming a real threat to investor sentiment after theTrump administration keyed up reminders that they still plan to pursue a package of tariffs that run the gamut from copper, to automobiles, to “reciprocal” tariffs on functionally every country that the US does business with. Countries that import Crude Oil from Venezuela are also on the docket to get dinged with an additional 20% tariff on everything going into the US, and European Union (EU) officials made tariff concerns all too real by acknowledging that the EU is bracing for tariffs of 20-25% on all goods imported by the US.
Daily digest market movers: Canadian Dollar rises then falls as safe haven flight takes control
The Canadian Dollar rallied four-tenths of one percent to a new five-week high before falling back to Wednesday’s opening bids as Loonie traders lose hope.
US President Donald Trump reiterated his intent to introduce an across-the-board tariff on all copper imports to match previous steel and aluminum tariffs.
The EU acknowledged that a tariff package of 20-25% on all European goods could be coming from the Trump team, on top of an additional 20% tariff for buying Crude Oil from Venezuela.
Tariff fears continue to simmer away and have begun to bubble over, crimping investor sentiment.
US policymakers are beginning to flash warning signs that Trump’s tariff strategy is making interest rate cuts a difficult proposition.
Canadian Dollar price forecast
The Canadian Dollar caught a fresh bid against the US Dollar to kick off Wednesday’s price action, forcing USD/CAD to a fresh five-week low at 1.4235. However, markets reversed course and pushed the pair back toward the 1.4300 handle. USD/CAD has cycled the 50-day Exponential Moving Average (EMA) at 1.4320 for about four months, with bids caught a congestion trap forcing the pair to grind sideways on the long-term charts.
USD/CAD daily chart
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