USD/CAD remains below 1.3700 due to US Dollar pullback, US-China discussion awaited
USD/CAD edges lower US Dollar corrects downward on Monday.
US Treasury Secretary Scott Bessent is scheduled to meet with Chinese officials on Monday.
The upbeat sentiment from the potential US-China trade talks eased concerns about the US-Canada tariff war.
USD/CAD retraces its gains from the previous session, trading around 1.3680 during the Asian hours on Monday. The pair edges lower as the US Dollar (USD) corrects downward after registering approximately 0.50% gains on Friday following United States (US) jobs data for May. The stronger-than-expected data raised the chances that the Federal Reserve (Fed) will keep its benchmark interest rate unchanged at its next two monetary policy meetings.
The US Bureau of Labor Statistics (BLS) reported that US Nonfarm Payrolls (NFP) climbed by 139,000 in May compared to April’s 147,000 increase (revised from 177,000). This reading came in above the market consensus of 130,000. Moreover, the Unemployment Rate held steady at 4.2% and the Average Hourly Earnings remained unchanged at 3.9%, both readings came in stronger than the market expectation.
The US Dollar may gain ground amid easing trade-war jitters. US President Donald Trump and China’s Xi Jinping spoke and agreed on Thursday that officials from both sides would soon resume trade negotiations aimed at ending the trade war. US Treasury Secretary Scott Bessent and two other Trump administration officials are set to meet with Chinese officials on Monday.
The positive sentiment surrounding the US-China trade talks also weakens concerns that US steel and aluminum tariffs would choke Canadian exports. Last week, Trump signed an executive order to double, from 25% to 50%, steel and aluminum tariffs. Prime Minister Mark Carney called the tariffs "unlawful and unjustified." Carney emphasized that the government is engaged in intensive and live negotiations to have these and other tariffs removed as part of a new economic and security partnership with the United States.
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
