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USD/CAD Slips as Trump’s 15% Tariff Shock Rocks Dollar, Oil-Fueled Loonie Gains Ground

Richard Dawson
Richard Dawson
Financial Market Analyst & Researcher
3 months ago
Oil Fueled Loonie Gains Ground

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Ultra-Compact Summary Section Summary USD/CAD weakens to around 1.3665 in Asian trading. Trump imposes a blanket 15% global tariff after the Supreme Court ruling. US Dollar pressured amid renewed trade uncertainty. Rising crude oil prices support the Canadian Dollar.

The Canadian Dollar strengthened as fresh tariff uncertainty weighed on the US Dollar. The US Supreme Court blocked Trump’s broader tariff measures under the IEEPA framework, prompting him to respond with a universal 15% import levy. The move has sparked concerns over trade disruptions and potential economic drag, undermining USD sentiment.

“Trade uncertainty is once again becoming a headwind for the US Dollar, particularly when tariff actions lack clarity and consistency,” said a senior North American FX strategist at a major global bank.

However, economists noted that most Canadian exports were already exempt from IEEPA-related tariffs, limiting direct economic fallout for Canada.

At the same time, geopolitical tensions are intensifying after reports that Trump is considering limited airstrikes on Iran if diplomatic efforts fail. The next round of US-Iran talks need to be closely monitored. The Escalation has lifted crude oil prices — a strategic development for Canada, who is a major oil exporter.

Technical Indicators & Market Trends

  • Trend Direction: Short-term bearish bias for USD/CAD
  • MACD: Bearish crossover. Downside pressure
  • Moving Averages: Price trading below the 50-day MA, but holding above the 200-day MA
  • Key Support Levels: 1.3650, then 1.3600
  • Key Resistance Levels: 1.3720, then 1.3785

Advice for Active Traders

Traders need to closely monitor the upcoming US Producer Price Index (PPI) report. Inflation data could significantly influence Federal Reserve rate expectations and direction of the USD.

  • Outlook: Bearish bias for USD/CAD below 1.3720
  • Bullish CAD: Stronger oil prices and weaker USD amid tariffs
  • Risk Sentiment: Escalation in US-Iran standoff triggering broader risk-off sentiment

Conservative traders might wait for a confirmed break below 1.3650 before targeting 1.3600. Meanwhile, volatility could spike ahead of the US-Iran talks and inflation data release.

The Canadian Dollar gained strength, supported by tariff-driven USD weakness and rising crude oil prices. However, geopolitical talks and upcoming US inflation data determine whether USD/CAD extends losses or makes a rebound. Traders should prepare for heightened volatility in the next couple of days.

Richard Dawson

About the author:

Richard Dawson

Financial Market Analyst & Researcher

Richard Dawson is an experienced market analyst and financial writer with nearly a decade of expertise in Forex, Crypto, and Gold trading. He specializes in VPS technologies, broker research, and copy trading systems. At SureShotFX, Richard writes blogs, educational guides, and research content that help traders make confident decisions.

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