Canadian Dollar: Trade conflict keeps downside risks alive against US Dollar - ING

ING’s Francesco Pesole highlights escalating US-Canada trade tensions, with new US tariffs on Canadian autos and parts announced for early next year. He notes both sides remain entrenched in conflict territory and argues the recent rebound in USD/CAD has room to extend beyond 1.390, as trade risks and broader Dollar dynamics continue to influence the pair.

US-Canada dispute underpins USD/CAD

"On Canada, the situation is still in the escalation phase. Trump has announced 50% tariffs on Canadian autos and parts from 1 January."

"The US-Canada dispute could incidentally amplify that negative dollar reaction."

"The distant implementation date suggests some caution around disrupting the auto sector ahead of the midterms, while also leaving ample room for negotiations."

"At the same time, both sides remain firmly in trade-conflict territory."

"We think the rebound in USD/CAD can extend beyond 1.390."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)