American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Investing

USD/CAD forecast as Canada prepares for Trump 50% steel tariffs

by admin June 1, 2025
June 1, 2025
USD/CAD forecast as Canada prepares for Trump 50% steel tariffs

The USD/CAD exchange rate has crashed this year as the US dollar index (DXY) has plunged from $110 earlier this year to $99. It has dropped from 1.4790 on February 3 to the current 1.3738. 

Canadian economy at risk amid Trump steel tariffs

The USD/CAD pair retreated on Friday as investors remained concerned about the trade relations between the US and Canada. 

These relations could worsen this month after Trump threatened to impose higher tariffs on imported steel and aluminum. These tariffs will now rise from the current 25% to 50% as he seeks to cushion American steel workers. 

Analysts believe that the Chinese economy could be the most exposed as the country is the biggest supplier of the two metals to the US. Canada accounts for about a quarter of all US steel tariffs and about half of aluminium. 

These tariffs will have a major impact on the Canadian economy. The steel sector employs over 23,000 Canadians directly and 100,000 indirectly, while the aluminum sector employs thousands more. 

Analysts anticipate that the Canadian economy will be affected this year. Data released last week showed that the economy expanded by 2.2% in the first quarter as exporters sought to get ahead of tariffs. 

In a recent note, analysts at the IMF downgraded the Canadian economic forecast. It downgraded the economy by 0.6% this year and 0.4% in 2026, citing the impact of tariffs. It expects the economy to grow by 1.4% and 1.6% in these two years.

Bank of Canada and Fed divergence

The USD/CAD exchange rate has reacted to the ongoing divergence between the Fed and the Bank of Canada. 

The BoC has been in a rate-cutting cycle in the past few months, moving them from 5.5% to 2.75%. It paused the rate cut in May, and the recent strong GDP number means that it may pause again in June. 

The Federal Reserve, on the other hand, has maintained status quo this year despite rising pressure from Trump to cut rates. Trump made the case for cuts directly to Jerome Powell in a meeting at the White House last week.

The Fed has insisted that it will not cut rates until it sees that inflation is falling towards the 2% target. While recent data showed that inflation has fallen, Fed officials expect tariffs to push inflation higher. 

Looking ahead, the next important catalyst for the USD/CAD pair will be the upcoming US nonfarm payrolls (NFP) data. It will also react to any trade development between the US and Canada.

USD/CAD technical analysis

USDCAD chart | Source: TradingView

The daily chart shows that the USD/CAD exchange rate has pulled back from the year-to-date high of 1.4790 to 1.3738. It has recently crashed below the key support at 1.4148, the lowest swing on February 15.

The pair has even formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. It has moved below the support at 1.3756, the lowest swing on May 7, and a level where it formed a double-bottom pattern. 

Therefore, the USD/CAD pair will likely continue falling as sellers target the next support at 1.3600. 

The post USD/CAD forecast as Canada prepares for Trump 50% steel tariffs appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Bitcoin price prediction for June: Will BTC rise or fall in June?
next post
USD/CNY forecast: China renminbi to surge as death cross forms

Related Posts

Ethereum price prediction May 2025: crash to $1K...

May 1, 2025

Allianz share price analysis: is it a buy,...

June 20, 2025

5 Top Weekly TSXV Stocks: Gold Stocks Lead...

August 12, 2024

SEC Approves 8 Spot Ethereum ETFs in Landmark...

May 24, 2024

United Airlines stock boomed in 2024: time to...

January 2, 2025

FPX Nickel Subsidiary CO2 Lock Corp. Achieves Successful...

February 21, 2024

Top 4 S&P 500 stocks to buy Polymarket...

April 4, 2025

Top 4 reasons the Nio stock price is...

July 24, 2025

Black Mountain Drilling Results

May 3, 2024

Yvonne Blaszczyk: Gold an “Absolute Necessity,” Key Factors...

February 23, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • FBI raid on John Bolton’s home in Washington linked to classified documents

      August 25, 2025
    • Argentine senate deals blow to Milei’s austerity agenda with university budget boost

      August 25, 2025
    • Jackson Hole Symposium: what Powell said about economic effects of Trump’s tariffs

      August 25, 2025
    • At Jackson Hole, Fed Chair Powell signals possible cuts while warning of uncertainty

      August 25, 2025
    • Trump threatens to fire Fed Governor Lisa Cook amid mortgage fraud allegations

      August 25, 2025

    Categories

    • Business (3,753)
    • Investing (2,776)
    • Latest News (2,048)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved