Trump announced a 35% high tariff to put pressure on the Canadian dollar, and the US dollar rebounded to a dense pressure range against the Canadian dollar
2025-07-11 14:19:25
Trump "escalates" tariffs and puts pressure on Canada to reach an agreement as soon as possible
Trump said on Thursday that the United States will impose a 35% tariff on goods from Canada starting August 1. He pointed out that this move was a response to Canada's previous "retaliatory tariffs" and criticized Canada for being "unconstructive" in trade negotiations.
Currently, the United States' 50% tariffs on Canadian steel and aluminum are still in place, and Canada is the largest source of imports of these two metals to the United States.
Trump also revealed that the European Union will receive a tax notification letter "today or tomorrow", further indicating the trend of full implementation of its tariff policy.
"Canada is in a weak position in trade negotiations, especially because its export structure is overly dependent on the U.S. market." - According to market research, Helen Murray, chief analyst at Toronto economic think tank NorthBay Strategies, pointed out
The market is worried that this round of policy tensions will hit Canadian exports, business confidence and the central bank's monetary policy space.
The Fed's stance remains on the sidelines, and the dollar remains supported
The dollar remained strong overall, mainly benefiting from the recent cautious attitude of Federal Reserve officials towards interest rate cuts. Chicago Federal Reserve President Austan Goolsbee said that the Fed's responsibility is to ensure employment and stable prices, rather than rashly cut interest rates to reduce government debt financing costs.
At the same time, the minutes of the Federal Open Market Committee (FOMC) meeting on June 17-18 released this week showed that most policymakers still tend to take a "wait-and-see stance" and wait for more economic data to release signals.
"Although inflation has clearly fallen, there are still differences within the decision-making level on whether to relax too early." - Jason Berman, an analyst at Federal Horizon, a Washington macro research institution, pointed out according to market surveys
From the technical chart, USD/CAD rebounded after receiving support in the 1.3640 area. The current upward target is the 1.3735 resistance level. After breaking through, it is expected to challenge the June high of 1.3770. If it falls again, the support below is seen in the 1.3650 and 1.3600 areas.
Technical indicators such as MACD and RSI turned mildly bullish on the hourly chart, suggesting that there is still upside momentum in the short term.
Editor's opinion:
The dominant factors in the short-term trend of USD/CAD are still the alternation between trade policy and the strong USD. The CAD is particularly vulnerable to the unilateral high tariff measures of the US due to its strong dependence on trade and economic sensitivity to exports. If the Canadian government fails to quickly reach a "compromise agreement" with the US, the CAD may continue to be under pressure; while the USD still has room to strengthen in the short and medium term with no strong expectations of interest rate cuts.
Trump said on Thursday that the United States will impose a 35% tariff on goods from Canada starting August 1. He pointed out that this move was a response to Canada's previous "retaliatory tariffs" and criticized Canada for being "unconstructive" in trade negotiations.
Currently, the United States' 50% tariffs on Canadian steel and aluminum are still in place, and Canada is the largest source of imports of these two metals to the United States.
Trump also revealed that the European Union will receive a tax notification letter "today or tomorrow", further indicating the trend of full implementation of its tariff policy.
"Canada is in a weak position in trade negotiations, especially because its export structure is overly dependent on the U.S. market." - According to market research, Helen Murray, chief analyst at Toronto economic think tank NorthBay Strategies, pointed out
The market is worried that this round of policy tensions will hit Canadian exports, business confidence and the central bank's monetary policy space.
The Fed's stance remains on the sidelines, and the dollar remains supported
The dollar remained strong overall, mainly benefiting from the recent cautious attitude of Federal Reserve officials towards interest rate cuts. Chicago Federal Reserve President Austan Goolsbee said that the Fed's responsibility is to ensure employment and stable prices, rather than rashly cut interest rates to reduce government debt financing costs.
At the same time, the minutes of the Federal Open Market Committee (FOMC) meeting on June 17-18 released this week showed that most policymakers still tend to take a "wait-and-see stance" and wait for more economic data to release signals.
"Although inflation has clearly fallen, there are still differences within the decision-making level on whether to relax too early." - Jason Berman, an analyst at Federal Horizon, a Washington macro research institution, pointed out according to market surveys
From the technical chart, USD/CAD rebounded after receiving support in the 1.3640 area. The current upward target is the 1.3735 resistance level. After breaking through, it is expected to challenge the June high of 1.3770. If it falls again, the support below is seen in the 1.3650 and 1.3600 areas.
Technical indicators such as MACD and RSI turned mildly bullish on the hourly chart, suggesting that there is still upside momentum in the short term.
Editor's opinion:
The dominant factors in the short-term trend of USD/CAD are still the alternation between trade policy and the strong USD. The CAD is particularly vulnerable to the unilateral high tariff measures of the US due to its strong dependence on trade and economic sensitivity to exports. If the Canadian government fails to quickly reach a "compromise agreement" with the US, the CAD may continue to be under pressure; while the USD still has room to strengthen in the short and medium term with no strong expectations of interest rate cuts.
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