The Canadian dollar weakened as Ottawa and Washington inched toward a potential trade war. USD/CAD traded near 1.3794 after the U.S. imposed steep tariffs on Canadian goods and Canada announced retaliation, while the same tension pushed gold price forecasts higher.
The Canadian dollar slid as USD/CAD traded around 1.3794. That marks a 0.25% rise in the U.S. dollar's value against the loonie. The move came as Ottawa and Washington inched toward a potential trade war.
Tariffs drive the loonie lower
The conflict stems from the U.S. imposing 50% tariffs on roughly $20 billion worth of Canadian goods, prompting Canada to announce retaliatory tariffs of its own. As a result, FX markets have shifted their focus to tariff-related risks rather than domestic economic indicators, a shift now influencing the Canadian dollar's trajectory.
Trade risk lifts gold's outlook
The same tension is spilling into commodities. Market participants appear to interpret the standoff as increasing the likelihood of gold hitting new highs, since gold typically serves as a safe-haven asset during periods of international uncertainty. Pricing in gold markets now points to a 70.9% probability of gold reaching $4,700 in August.
Source: Crypto Briefing
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