USD/CAD plummets to 1.3450 area on reports of US removing tariffs on Canada
- The U.S. and Canada are said to close to a deal on steel/aliminum tariffs.
- US Dollar Index advances to 98 on upbeat consumer sentiment data.
The USD/CAD pair rose to its highest level since April 25 at 1.3513 in the early American session but made a sharp U-turn on the latest headlines surrounding the U.S.-Canada trade negotiations. As of writing, the pair was virtually unchanged on the day at 1.3458.
Several news outlets in the last hour reported that the U.S. was poised to remove the steel and aliminum tariffs on Canada and Mexico to provide a boost to the loonie. "High-level discussions to hammer out any final details are happening now, and the deal could be announced as early as Friday," Canadian Broadcasting Corporation (CBC) reported today.
On the other hand, the greenback preserved its strength after the University of Michigan's Consumer Sentiment Index in the U.S. jumped to its highest level in 15 years at 102.4 in May from 97.2 in April. On the back of the upbeat confidence data, the US Dollar Index advanced to a fresh 2-week high and was last at 97.98, adding 0.16% on a daily basis. Commenting on the data, "Happiness has many definitions. Surely the Michigan Consumer Sentiment reading for May, 102.4 the best score in over a decade, is one," said FXStreet senior analyst Joseph Trevisani.
Meanwhile, crude oil prices stay calm with the barrel of West Texas Intermediate moving sideways above $63, allowing the loonie to react to the trade headlines.
Technical levels to consider
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
