USD/CAD edges higher to around 1.4275 in Wednesday’s late American session.
Trump said he will impose a 10% baseline tariff across the board.
Trump’s reciprocal tariff policy and lower crude oil prices weigh on the commodity-linked Canadian Dollar.
The USD/CAD pair attracts some buyers to near 1.4275, snapping the two-day losing streak during the late American session on Thursday. The Canadian Dollar (CAD) weakens against the US Greenback as traders turn cautious after US President Donald Trump signed a reciprocal tariff policy at the White House.
Trump said late Wednesday that he will set a 10% baseline tariff across the board. The Trump administration stated that Canada and Mexico will be exempt from the baseline 10% tariff rate, as well as reciprocal levies for specific countries for now.
The 10% tariff would take effect only when the original 25% duties Trump slapped on Canadian and Mexican imports are terminated or suspended. The 25% tariff was based on allegations that the neighboring countries were failing to stem the flow of drugs and crime into the United States. Canadian Prime Minister Mark Carney said that the country will fight Trump's tariffs with countermeasures, raising concerns over the trade war.
A fall in Crude Oil prices amid the fears that a global trade war may dampen demand for crude exerts some selling pressure on the commodity-linked Loonie. It’s worth noting that Canada is the largest oil exporter to the United States (US), and lower crude oil prices tend to have a negative impact on the CAD value.
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