USD/CAD Surges Toward 1.3700 Amid Tariff Tensions and Oil Price Slump

USD/CAD Rebounds Toward 1.3700 on US Tariff Fears and Oil Pressure

Risk Aversion Drives Demand for US Dollar

The USD/CAD pair rallied to around 1.3700 in Monday’s European session, powered by renewed risk aversion as traders respond to growing uncertainty around US trade tariffs. The move follows letters sent by President Trump to unspecified countries outlining new tariff impositions, sending the US Dollar higher across the board.

As investors flock to safe-haven assets, the Greenback has gained 0.5% intraday and is now 0.8% higher than last week’s lows. The looming July 9 deadline for the end of the 90-day tariff reprieve continues to inject volatility into global FX markets.

Canadian Dollar Under Pressure from Oil Decline

Meanwhile, the Canadian Dollar (CAD) remains under pressure as crude oil prices tumble, reacting to OPEC+’s announcement of a larger-than-expected output increase. The oil market weakness undermines CAD, given its close correlation with energy exports.

The combination of lower oil prices and strong US Dollar demand has triggered fresh upward momentum in the USD/CAD pair.

Market Focus: Tariff Details and Oil Trend

Market participants remain cautious amid:

• Lack of clarity on the size and scope of the tariffs
• Uncertainty over the exact implementation date — July 9 or August 1
• Volatile oil prices following OPEC+ news

Traders will closely watch developments from Washington, as well as energy market trends, for near-term direction.

Key Takeaways:

• USD/CAD trades near 1.3700, up 0.5% on the day
• Safe-haven flows strengthen the US Dollar
• Oil slump adds downward pressure on CAD
• Markets await more clarity on US tariff strategy

Check live USD/CAD analysis on Tredu.com/forex