Trade policy uncertainty weighed on the US dollar, causing the USD/CAD pair to fluctuate and decline.
2026-02-26 14:13:30
The US dollar continued its decline against the Canadian dollar during Thursday's Asian session, trading around 1.3665, down about 0.20% on the day. Despite the short-term weakness, the market remained cautious ahead of the US-Iran nuclear negotiations, limiting the downside potential of the exchange rate.
Regarding the US dollar, policy uncertainty continues to weigh on its performance. In his State of the Union address, US President Donald Trump stated that the White House remains committed to its tariff policy framework and, after the US Supreme Court rejected some broad tariff measures, has moved towards implementing a 10% temporary global tariff for 150 days, hinting at a possible future increase to 15%.
Policy volatility exacerbated market concerns about global supply chain disruptions, weakening the attractiveness of dollar assets. Furthermore, overall risk sentiment was optimistic, and rising global stock markets reduced the safe-haven demand for the dollar. Funds flowed more towards risk assets, putting temporary downward pressure on the dollar index.
In the crude oil market, prices remained range-bound at low levels. A significant increase in US crude oil inventories put short-term pressure on prices, but market concerns about a potential military conflict between the US and Iran disrupting Middle Eastern supplies limited further price declines.
The weak performance of crude oil prices has limited the upward momentum of the Canadian dollar, which is closely correlated with commodities, thus restricting the downside potential of USD/CAD.
From a technical perspective, USD/CAD is showing a short-term pullback from its highs, but this hasn't broken the overall consolidation pattern. The price remains within its recent range, indicating a relatively balanced market sentiment between buyers and sellers. The RSI indicator is hovering around 50, suggesting neutral market momentum.
Short-term support levels to watch are first the psychological level of 1.3600, followed by the 1.3550 area. A break below this level could accelerate the pullback to the support around 1.3480. Resistance is located in the 1.3720 area. If the price reclaims this level, the rebound could continue and test the highs near 1.3800.
Editor's Note:
The current USD/CAD exchange rate is exhibiting a dual dynamic of "US dollar policy pressure vs. geopolitical risk premium." Trade policy uncertainty is weakening the US dollar, but weak oil prices and a lack of strong fundamental drivers for the Canadian dollar limit its downside potential. In the short term, it is more likely to maintain range-bound trading, awaiting a clear trend breakout signal before engaging in trend-following operations.
Regarding the US dollar, policy uncertainty continues to weigh on its performance. In his State of the Union address, US President Donald Trump stated that the White House remains committed to its tariff policy framework and, after the US Supreme Court rejected some broad tariff measures, has moved towards implementing a 10% temporary global tariff for 150 days, hinting at a possible future increase to 15%.
Policy volatility exacerbated market concerns about global supply chain disruptions, weakening the attractiveness of dollar assets. Furthermore, overall risk sentiment was optimistic, and rising global stock markets reduced the safe-haven demand for the dollar. Funds flowed more towards risk assets, putting temporary downward pressure on the dollar index.
In the crude oil market, prices remained range-bound at low levels. A significant increase in US crude oil inventories put short-term pressure on prices, but market concerns about a potential military conflict between the US and Iran disrupting Middle Eastern supplies limited further price declines.
The weak performance of crude oil prices has limited the upward momentum of the Canadian dollar, which is closely correlated with commodities, thus restricting the downside potential of USD/CAD.
From a technical perspective, USD/CAD is showing a short-term pullback from its highs, but this hasn't broken the overall consolidation pattern. The price remains within its recent range, indicating a relatively balanced market sentiment between buyers and sellers. The RSI indicator is hovering around 50, suggesting neutral market momentum.
Short-term support levels to watch are first the psychological level of 1.3600, followed by the 1.3550 area. A break below this level could accelerate the pullback to the support around 1.3480. Resistance is located in the 1.3720 area. If the price reclaims this level, the rebound could continue and test the highs near 1.3800.
Editor's Note:
The current USD/CAD exchange rate is exhibiting a dual dynamic of "US dollar policy pressure vs. geopolitical risk premium." Trade policy uncertainty is weakening the US dollar, but weak oil prices and a lack of strong fundamental drivers for the Canadian dollar limit its downside potential. In the short term, it is more likely to maintain range-bound trading, awaiting a clear trend breakout signal before engaging in trend-following operations.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
